EXHIBIT 4.42
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
dated as of March 6, 2001
among
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those Subsidiaries of
Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
AS SET FORTH IN SECTION 21 HEREOF, LESSOR HAS ASSIGNED TO THE TRUSTEE (AS
DEFINED HEREIN) ALL OF LESSOR'S RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE.
TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM
IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE
TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED
COUNTERPART NO. 1, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE
RECEIPT THEREFOR EXECUTED BY THE TRUSTEE ON THE SIGNATURE PAGE THEREOF.
[THIS IS NOT THE ORIGINAL EXECUTED COUNTERPART NO. 1]
[THIS IS THE ORIGINAL EXECUTED COUNTERPART NO. 1
(IF BEARING ORIGINAL SIGNATURES)]
TABLE OF CONTENTS
Page
SECTION 1. CERTAIN DEFINITIONS..........................................1
1.1 Certain Definitions..........................................1
1.2 Accounting and Financial Determinations......................2
1.3 Cross References; Headings...................................2
1.4 Interpretation...............................................2
SECTION 2. GENERAL AGREEMENT............................................3
2.1 Leasing of Vehicles..........................................3
2.2 Right of Lessees to Act as Lessor's Agent....................4
2.3 Payment of Purchase Price by Lessor..........................4
2.4 Non-liability of Lessor......................................4
SECTION 3. TERM.........................................................5
3.1 Vehicle Lease Commencement Date..............................5
3.2 Lease Commencement Date; Lease Expiration Date...............5
SECTION 4. CONDITIONS PRECEDENT.........................................6
4.1 Conditions to Each Lease of Vehicles.........................6
4.2 Additional Conditions to Leases of Refinanced Vehicles.......6
SECTION 5. RENT AND CHARGES.............................................7
5.1 Payment of Rent..............................................7
5.2 Payment of Availability Payment..............................7
5.3 Payment of Monthly Supplemental Payments.....................8
5.4 Payment of Termination Payments, Casualty Payments, and
Late Return Payments.........................................8
5.5 Late Payment.................................................8
SECTION 6. INSURANCE....................................................8
6.1 Fleet Insurance..............................................8
6.2 Information..................................................8
SECTION 7. CASUALTY OBLIGATION..........................................8
SECTION 8. VEHICLE USE..................................................9
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND
FINES.......................................................10
i
SECTION 10. MAINTENANCE AND REPAIRS.....................................10
SECTION 11. VEHICLE WARRANTIES..........................................11
SECTION 12. VEHICLE USAGE REQUIREMENTS AND DISPOSITION..................11
12.1 Usage.......................................................11
12.2 Disposition Procedure.......................................11
12.3 Termination Payments........................................11
SECTION 13. LATE RETURN PAYMENTS........................................12
SECTION 14. REDESIGNATION OF VEHICLES...................................12
SECTION 15. GENERAL INDEMNITY...........................................13
15.1 Indemnity of the Lessor.....................................13
15.2 Indemnification of the Trustee..............................15
15.3 Reimbursement Obligation by the Lessees.....................15
15.4 Notice to Lessee of Claims..................................15
15.5 Defense of Claims...........................................15
SECTION 16. ASSIGNMENT..................................................16
SECTION 17. DEFAULT AND REMEDIES THEREFOR...............................16
17.1 Lease Events of Default.....................................16
17.2 Effect of Lease Event of Default............................17
17.3 Rights of Lessor Upon Lease Event of Default,
Liquidation Event of Default or Limited Liquidation
Event of Default............................................17
17.4 Rights of Trustee Upon Liquidation Event of
Default, Limited Liquidation Event of Default,
Manufacturer Event of Default and Non-Performance
of Certain Covenants........................................18
17.5 Measure of Damages..........................................19
17.6 Application of Proceeds.....................................20
SECTION 18. MANUFACTURER EVENTS OF DEFAULT..............................21
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE......................21
SECTION 20. SURVIVAL....................................................21
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL
AGENT AND TRUSTEE...........................................21
ii
SECTION 22. MODIFICATION AND SEVERABILITY...............................23
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES......................23
23.1 Due Incorporation, Authorization, No Conflicts, Etc.........23
23.2 Financial Information; Financial Condition..................24
23.3 Litigation..................................................24
23.4 Liens.......................................................24
23.5 Necessary Actions...........................................24
23.6 Employee Benefit Plans......................................25
23.7 Investment Company Act......................................25
23.8 Regulations T, U and X......................................25
23.9 Business Locations; Trade Names; Principal Places of
Business Locations..........................................25
23.10 Taxes.......................................................25
23.11 Governmental Authorization..................................26
23.12 Compliance with Laws........................................26
23.13 Eligible Vehicles; Eligible Franchisees.....................26
23.14 Supplemental Documents True and Correct.....................26
23.15 Accuracy of Information.....................................26
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS...............................27
24.1 Corporate Existence; Foreign Qualification..................27
24.2 Books, Records and Inspections..............................27
24.3 Vehicle Disposition Programs................................27
24.4 Reporting Requirements......................................27
24.5 Taxes and Liabilities.......................................32
24.6 Compliance with Laws........................................32
24.7 Maintenance of Separate Existence...........................32
24.8 Master Collateral Agent as Lienholder.......................32
24.9 Maintenance of Property.....................................32
24.10 Access to Certain Documentation and Information
Regarding the Collateral....................................33
24.11 Maintenance of Credit Enhancement...........................34
24.12 Certain Additional Actions..................................34
24.13 Minimum Depreciation Rate...................................34
SECTION 25. CERTAIN NEGATIVE COVENANTS..................................34
25.1 Mergers, Consolidations.....................................35
25.2 Other Agreements............................................35
25.3 Liens.......................................................35
25.4 Use of Vehicles.............................................36
25.5 Texas and Hawaii Vehicles...................................36
SECTION 26. SERVICING COMPENSATION......................................36
26.1 Fees........................................................36
iii
26.2 Expenses....................................................36
SECTION 27. GUARANTY....................................................37
27.1 Guaranty....................................................37
27.2 Scope of Guarantor's Liability..............................37
27.3 Lessor's Right to Amend this Lease..........................37
27.4 Waiver of Certain Rights by Guarantor.......................38
27.5 Lessees' Obligations to Guarantor and Guarantor's
Obligations to Lessees Subordinated.........................39
27.6 Guarantor to Pay Lessor's Expenses..........................40
27.7 Reinstatement...............................................40
27.8 Pari Passu Indebtedness.....................................40
27.9 Tax Indemnity...............................................40
27.10 Third-Party Beneficiaries...................................41
SECTION 28. ADDITIONAL LESSEES..........................................41
28.1 Additional Lessees..........................................41
SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR..........................42
SECTION 30. SUBMISSION TO JURISDICTION..................................42
SECTION 31. GOVERNING LAW...............................................43
SECTION 32. JURY TRIAL..................................................43
SECTION 33. NOTICES.....................................................43
SECTION 34. HEADINGS....................................................44
SECTION 35. EXECUTION IN COUNTERPARTS...................................44
SECTION 36. EFFECTIVENESS...............................................44
iv
SCHEDULES AND ATTACHMENTS
Annex A Operating Lease
Annex B Financing Lease
Schedule 1 Litigation Claims
Schedule 2 [Reserved]
Schedule 3 Business Locations
Schedule 4 Liens
ATTACHMENT A-1 Information on Refinanced Vehicles and Eligible Receivables
ATTACHMENT A-2 Vehicle Acquisition Schedule
ATTACHMENT B Form of Power of Attorney
ATTACHMENT C Form of Certification of Trade or Business Use
ATTACHMENT D Form of Affiliate Joinder in Lease
ATTACHMENT E Form of Annual Certificate
v
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
This Master Motor Vehicle Lease and Servicing Agreement (the "Base
Lease" and, as supplemented by the Lease Annexes, this "Agreement" or "Lease"),
dated as of March 6, 2001, is by and among RENTAL CAR FINANCE CORP., a special
purpose Oklahoma corporation (the "Lessor" or "RCFC"), DOLLAR RENT A CAR
SYSTEMS, INC., an Oklahoma corporation ("Dollar"), as lessee and servicer,
THRIFTY RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty"), as lessee
and servicer, and those Subsidiaries of DTAG (as defined below) from time to
time becoming Lessees hereunder pursuant to Section 28 hereof (each, an
"Additional Lessee"), as lessee and servicer (Thrifty, Dollar, and the
Additional Lessees, in their respective capacities as lessees, each a "Lessee"
and, collectively, the "Lessees", and, in their respective capacities as
servicers, each a "Servicer" and, collectively, the "Servicers"), and DOLLAR
THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation ("DTAG"), as Master
Servicer (in such capacity, the "Master Servicer") and as Guarantor (in such
capacity, the "Guarantor").
W I T N E S S E T H:
WHEREAS, the Lessor (such capitalized term, together with all other
capitalized terms used herein, shall have the meaning assigned thereto in
Section 1) intends to purchase, finance and refinance the purchase of, Eligible
Vehicles from one or more Manufacturers with the proceeds obtained from the
issuance by the Lessor of its Rental Car Asset Backed Notes, Series 2001-1,
pursuant to the Base Indenture and the Series 2001-1 Supplement thereto referred
to below and any additional Series of Notes identified in the related Series
Supplement as a Group III Series of Notes; and
WHEREAS, the Lessor desires to lease to the Lessees, and the Lessees
desire to lease from the Lessor, Eligible Vehicles for use in the Lessees'
respective businesses, including subleasing Vehicles to Eligible Franchisees;
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
1.1 Certain Definitions. As used in this Lease and unless the context
requires a different meaning, capitalized terms not otherwise defined herein
shall have the meanings assigned to such terms in (a) the Series 2001-1
Supplement, dated as of March 6, 2001, between RCFC, as issuer, and Bankers
Trust Company, a New York banking corporation, as trustee (in such capacity, the
"Trustee") (as such Series 2001-1 Supplement may be amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof, the "Series 2001-1 Supplement"), to the Base Indenture,
dated as of December 13, 1995, between RCFC and the Trustee, as amended by
Amendment to Base Indenture, dated as of December 23, 1997, between RCFC and the
Trustee (as amended by such amendment and as the same may be further amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof, the "Base Indenture") and any additional
Series Supplement to the Base Indenture relating to a Series of Notes identified
in such Series Supplement as a Group III Series of Notes and (b) the Definitions
List attached as Schedule 1 to the Base Indenture as in effect as of the date
hereof (as such Definitions List may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, the "Definitions List"), provided, that any capitalized term used
but not defined herein and defined in each of the Series 2001-1 Supplement and
the Definitions List shall have the meaning set forth in the Series 2001-1
Supplement.
1.2 Accounting and Financial Determinations. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined, or any accounting computation is required to be made, for the
purpose of this Lease, such determination or calculation shall be made, to the
extent applicable and except as otherwise specified in this Lease, in accordance
with GAAP. When used herein, the term "financial statement" shall include the
notes and schedules thereto.
1.3 Cross References; Headings. The words "hereof", "herein" and
"hereunder" and words of a similar import when used in this Lease shall refer to
this Lease as a whole and not to any particular provision of this Lease. Annex,
Section, Schedule and Exhibit references contained in this Lease are references
to Annexes, Sections, Schedules and Exhibits in or to this Lease unless
otherwise specified. Any reference in any Section or definition to any clause
is, unless otherwise specified, to such clause of such Section or definition.
The various headings in this Lease are inserted for convenience only and shall
not affect the meaning or interpretation of this Lease or any provision hereof.
1.4 Interpretation. In this Lease, unless the context otherwise
requires:
(a) the singular includes the plural and vice versa;
(b) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Lease, and reference to any Person in a particular
capacity refers only to such Person in such capacity;
(c) reference to any gender includes the other gender;
(d) reference to any Requirement of Law means such Requirement
of Law as amended, modified, codified or reenacted, in whole or in
part, and in effect from time to time;
(e) "including" (and, with correlative meaning, "include")
means including without limiting the generality of any description
preceding such term;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions;
and
2
(h) with respect to the determination of any period of time,
"from" means "from and including" and "to" and "through" mean "to but
excluding".
SECTION 2. GENERAL AGREEMENT.(a) As specified in the Lease Annexes,
the Lessees and the Lessor intend that this Lease be (i) an operating lease with
respect to the Acquired Vehicles and (ii) a financing arrangement with respect
to the Financed Vehicles.
(b) If, notwithstanding the intent of the parties to this Lease, this
Lease is deemed by any court, tribunal, arbitrator or other adjudicative
authority in any proceeding (each, a "Court") to constitute a financing
arrangement or otherwise not to constitute a "true lease" with respect to the
Acquired Vehicles, then it is the intention of the parties that this Lease
together with the Master Collateral Agency Agreement, as such agreements apply
to the Acquired Vehicles, shall constitute a security agreement under applicable
law, and it is the intention of the parties that this Lease together with the
Master Collateral Agency Agreement, as such agreements apply to the Financed
Vehicles, shall in all events constitute a security agreement under applicable
law. Each Lessee hereby acknowledges that it has granted to the Master
Collateral Agent, pursuant to the Master Collateral Agency Agreement, for the
benefit of the Trustee, a first priority security interest in all of such
Lessee's right, title and interest in and to the Lessee Grantor Master
Collateral (as defined therein) as collateral security for the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all of the obligations and liabilities of such
Lessee to the Lessor and the Trustee, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred
(including interest accruing after the Lease Expiration Date and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding), which may arise under, out
of, or in connection with, this Lease and any other document made, delivered or
given in connection herewith, whether on account of rent, principal, interest,
reimbursement obligations, fees, indemnities, costs, or expenses (including all
fees and disbursements of counsel to the Lessor or the Trustee that are required
to be paid by such Lessee pursuant to the terms hereof).
2.1 Leasing of Vehicles. Subject to the terms and conditions hereof,
the Lessor agrees to lease to each Lessee and each Lessee agrees to lease from
the Lessor each additional Acquired Vehicle or Financed Vehicle identified in
Vehicle order summaries (each, a "Vehicle Order") produced from time to time by
such Lessee, listing Eligible Vehicles ordered by the Lessee for itself or as
agent for the Lessor, pursuant to the terms of any applicable Eligible Vehicle
Disposition Programs or otherwise. The Lessor shall, subject to Section 4 and to
compliance with the terms of the Indenture, make available to the Lessees under
this Lease financing for Financed Vehicles (other than Texas Vehicles) in an
aggregate amount, and Acquired Vehicles and Texas Vehicles for lease to the
Lessees hereunder in an aggregate Net Book Value, which collectively shall not
exceed the Maximum Lease Commitment. The applicable Lessee shall make available
to the Lessor (a) in the case of (i) the refinancing of any other Eligible
Vehicle pursuant to Section 2.3 of the Master Collateral Agency Agreement
(collectively, (including, without limitation, any Vehicles previously subject
to any other Master Lease and refinanced pursuant to such Master Lease), the
"Refinanced Vehicles"), and/or (ii) the refinancing of Eligible Receivables, a
schedule as set forth in Attachment A-1 hereto containing information concerning
the Refinanced Vehicles and the Eligible Receivables of a scope agreed upon by
the Lessor and such Lessee (a "Refinancing Schedule") , and (b) in the case of
all other Vehicles, a schedule containing the information with respect to the
Vehicles included within the Vehicle Order for such Vehicle as is set forth in
Attachment A-2 hereto, or in such form as is otherwise requested by the Lessor
(each, a "Vehicle Acquisition Schedule"). In addition, each Lessee shall provide
such other information regarding such Vehicles as the Lessor may reasonably
require from time to time. The Lessor shall lease to the Lessees, and the
Lessees shall lease from the Lessor, only Vehicles that are Eligible Vehicles.
This Lease, together with the Vehicle Disposition Programs and other incentive
programs relating to the Vehicles and any other related documents attached to
this Lease or submitted with a Vehicle Order or Refinancing Schedule
(collectively, the "Supplemental Documents"), will constitute the entire
agreement regarding the leasing of Vehicles by the Lessor to the Lessees.
3
2.2 Right of Lessees to Act as Lessor's Agent. The Lessor agrees that
each Lessee may act as the Lessor's agent in placing Vehicle Orders on behalf of
the Lessor, as well as filing claims on behalf of the Lessor for damage in
transit, and other delivery related claims with respect to the Vehicles leased
hereunder; provided, however, that the Lessor may hold the applicable Lessee
liable for such Lessee's actions in performing as the Lessor's agent hereunder.
In addition, the Lessor agrees that each Lessee may make arrangements for
delivery of Vehicles to a location selected by such Lessee at such Lessee's
expense. Each Lessee or any related Sublessee, as applicable, may accept or
reject Eligible Vehicles upon delivery in accordance with such Lessee's
customary business practices, and any Eligible Vehicle, if rejected, will be
deemed a Casualty hereunder. The applicable Lessee, acting as agent for the
Lessor, shall be responsible for pursuing any rights of the Lessor with respect
to the return of any Eligible Vehicle to the Manufacturer thereof, or the
applicable auction or dealer, as applicable, pursuant to the preceding sentence.
Each Lessee agrees that all vehicles ordered as provided herein shall be
Eligible Vehicles and shall be ordered utilizing the procedures consistent with
the applicable Vehicle Disposition Program or any guidelines of the
Manufacturer, auction or dealer, as applicable, for the ordering or purchasing
of Non-Program Vehicles, in each case as and to the extent applicable.
2.3 Payment of Purchase Price by Lessor. Upon receipt of the
Manufacturer's invoice and certificate of origin in respect of any new Vehicle,
or such other customary documentation in respect of any used Vehicle, the Lessor
or its agent shall pay or cause to be paid to the auction, the dealer or the
related Manufacturer, as applicable, the costs and expenses incurred in
connection with the acquisition of such Vehicle under the applicable Vehicle
Disposition Program (in the case of a Program Vehicle) or otherwise (in the case
of a Non-Program Vehicle) as established by the invoice of the auction, the
dealer or the Manufacturer, as the case may be (the "Initial Acquisition Cost"),
for such Vehicle and the applicable Lessee shall pay all applicable costs and
expenses of freight, packing, handling, storage, shipment and delivery of such
Vehicle to the extent that the same have not been included within the Initial
Acquisition Cost; provided that solely in the case of any Refinanced Vehicle and
any Eligible Receivable, the Lessor shall pay to the Master Collateral Agent (x)
the aggregate Net Book Value as of the Vehicle Lease Commencement Date of the
Refinanced Vehicles, and (y) the face amount of the Eligible Receivables being
refinanced on the Vehicle Lease Commencement Date.
2.4 Non-liability of Lessor. The Lessor shall not be liable to a
Lessee for any failure or delay in obtaining Vehicles or making delivery
thereof. AS BETWEEN THE LESSOR AND THE LESSEES, ACCEPTANCE FOR LEASE OF THE
VEHICLES SHALL CONSTITUTE THE APPLICABLE LESSEE'S ACKNOWLEDGMENT AND AGREEMENT
THAT THE APPLICABLE LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT THE VEHICLES
ARE IN GOOD ORDER AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN,
SPECIFICATIONS AND CAPACITY SELECTED BY SUCH LESSEE, THAT SUCH LESSEE IS
SATISFIED THAT THE SAME ARE SUITABLE FOR ITS USE AND THAT THE LESSOR IS NOT A
MANUFACTURER, AN AGENT OF THE MANUFACTURER OR OTHERWISE ENGAGED IN THE SALE OR
DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO
MERCHANTABILITY, CONDITION, QUALITY, CAPABILITY, WORKMANSHIP, DURABILITY OR
SUITABILITY OF SUCH VEHICLES IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE
PURPOSES OR USES OF SUCH LESSEE, OR ANY WARRANTY THAT THE LEASED VEHICLES WILL
SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT SPECIFICATION, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT THERETO, AND AS BETWEEN THE LESSOR AND SUCH LESSEE, SUCH
LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE
SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED
VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR,
AND EACH LESSEE LEASES THE LEASED VEHICLES "AS IS." The Lessor shall not be
liable for any failure or delay in delivering any Vehicle ordered for lease
pursuant to this Lease, or for any failure to perform any provision hereof,
resulting from fire or other casualty, natural disaster, riot, strike or other
labor difficulty, governmental regulation or restriction, or any cause beyond
the Lessor's direct control. IN NO EVENT SHALL THE LESSOR BE LIABLE FOR ANY
INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER CONSEQUENTIAL, INCIDENTAL OR
SPECIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED, WHETHER RESULTING FROM ANY
DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, OR OTHERWISE,
AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF THE SAME.
4
SECTION 3. TERM.
3.1 Vehicle Lease Commencement Date. The "Vehicle Lease Commencement
Date" shall mean, for each Vehicle, the earlier of (a) the date referenced in
the Vehicle Acquisition Schedule or Refinancing Schedule with respect to such
Vehicle, and (b) the date that funds are expended by the Lessor to acquire or
finance the acquisition of such Vehicle (with respect to such Vehicle, the
"Vehicle Funding Date"). A vehicle shall be deemed hereunder to be a Vehicle
leased under this Lease on each day during the period (the "Vehicle Term") from
and including the Vehicle Lease Commencement Date to but excluding the Vehicle
Lease Expiration Date.
3.2 Lease Commencement Date; Lease Expiration Date. The "Lease
Commencement Date" shall mean the Closing Date for the Series 2001-1 Notes as
the first Group III Series of Notes issued under the Indenture. The "Lease
Expiration Date" shall mean the later of (i) the date of the payment in full of
all Series of Notes included in the Group III Series of Notes and all
outstanding Carrying Charges related thereto, and (ii) the Vehicle Lease
Expiration Date for the last Vehicle subject to lease by a Lessee hereunder. The
"Term" of this Lease shall mean the period commencing on the Lease Commencement
Date and ending on the Lease Expiration Date.
5
SECTION 4. CONDITIONS PRECEDENT.
4.1 Conditions to Each Lease of Vehicles. The agreement of the Lessor
to make available (a) any Acquired Vehicle for lease to the applicable Lessee,
(b) Texas Vehicles and (c) financing for the acquisition of or refinancing of
any other Vehicle for lease to such Lessee upon such Lessee's placement of a
Vehicle Order, for itself or as agent of the Lessor, or its delivery of a
Refinancing Schedule, as applicable, is subject to the terms and conditions of
the Indenture and subject to the satisfaction of the following conditions
precedent as of the Vehicle Lease Commencement Date for such Vehicle:
4.1.1 No Default. No Lease Event of Default or Amortization
Event shall have occurred and be continuing on such date or would
result from the leasing of such Vehicle or Vehicles.
4.1.2 Limitations of the Acquisition of Certain Vehicles.
After giving effect to the inclusion of such Vehicle under this Lease,
there shall not be a failure or violation of any of the conditions,
requirements, or restrictions specified in any related Supplement with
respect to the leasing of Eligible Vehicles under this Lease.
4.1.3 Vehicle Order. The applicable Lessee shall have complied
with the applicable provisions of Section 2.1 of this Lease.
4.1.4 Funding. The aggregate amount of funds to be expended by
the Lessor on any one date to acquire or finance the acquisition of any
Vehicles shall not exceed the sum of (a) the aggregate Net Book Value
of all such Vehicles plus (b) the aggregate face amount of any related
Eligible Receivables being refinanced on such date.
4.1.5 Maximum Non-Program Percentage. The leasing of such
Vehicles will not cause the aggregate Net Book Value of Non-Program
Vehicles then being leased under this Lease to exceed the Maximum
Non-Program Percentage and will not cause any of the Lease commitments
expressed in Section 3 of each of Annex A and B to be exceeded.
4.1.6 Eligible Vehicle. Each Vehicle to be leased hereunder on
such date shall be an Eligible Vehicle.
4.2 Additional Conditions to Leases of Refinanced Vehicles. In
addition to the conditions set forth in Section 4.1 above, in connection with
the leasing of Refinanced Vehicles and related Eligible Receivables, to evidence
the refinancing of such Refinanced Vehicles and related Eligible Receivables on
the applicable Vehicle Lease Commencement Date and the conveyance on such date
of a security interest in such Refinanced Vehicles and related Eligible
Receivables to the Master Collateral Agent, the applicable Lessees shall have
made available to the Lessor on or prior to the applicable Vehicle Lease
Commencement Date the following:
6
(a) a Refinancing Schedule concerning such Refinanced Vehicles
and related Eligible Receivables being refinanced on such Vehicle
Lease Commencement Date;
(b) if not previously liened to the Master Collateral Agent, a
report of the results of a search of the appropriate records of the
principal place in which each Lessee of such Refinanced Vehicles does
business and the county and state in which each Lessee's principal
office is located, which shall show no liens or other security
interests (other than Permitted Liens) with respect to such Vehicles
and the related Vehicle Disposition Programs (to the extent not already
liened and assigned to the Master Collateral Agent) or, in the event
that such search reveals any such non-permitted Lien or security
interest, there shall be delivered to the Trustee a termination of such
Lien or security interest together with appropriate UCC termination
statements or UCC partial releases thereof;
(c) if not previously liened to the Master Collateral Agent,
confirmation from each lender or its agent holding a security interest
in any Refinanced Vehicle and Eligible Receivable stating
unconditionally (A) that, if any sums are to be paid to such lender in
connection with the lease of such Refinanced Vehicle and the
refinancing of the related Eligible Receivables, such lender has been
paid the full amount due to it in connection with such refinancing and
(B) that any lien or security interest of such lender or its agent in
such Refinanced Vehicle and related Eligible Receivable has been
released;
(d) to the extent not already granted and assigned to the
Master Collateral Agent, a fully executed assignment agreement granting
and assigning to the Master Collateral Agent a first priority security
interest in each such Refinanced Vehicle and any Eligible Receivables,
the related Vehicle Disposition Programs, if any, and any other Master
Lease Collateral relating to such Refinanced Vehicles and Eligible
Receivables;
(e) if the lien of the Master Collateral Agent has not been
perfected, delivery to the Lessor for filing in the appropriate filing
office fully executed UCC-1 Financing Statements necessary to perfect
the interests of the Master Collateral Agent in the Eligible
Receivables;
(f) at the time of Refinancing Schedule is made available, the
applicable Lessee will be deemed to have represented that all the
conditions precedent under this Lease to the leasing of such Refinanced
Vehicles and financing of the Eligible Receivables under this Lease
have been satisfied, including a representation that each such
receivable is an Eligible Receivable.
SECTION 5. RENT AND CHARGES. Each Lessee will pay Rent and certain
other charges on a monthly basis as set forth in this Section 5:
5.1 Payment of Rent. On each Due Date, each Lessee shall pay to the
Lessor the aggregate of all Rent that has accrued during the Related Month with
respect to the Vehicles leased by such Lessee, as provided in the related Lease
Annexes.
5.2 Payment of Availability Payment. On each Due Date, each Lessee
shall pay to the Lessor its allocable share of the Availability Payment in
respect of the unutilized portion of the Maximum Lease Commitment. "Availability
Payment" with respect to each Due Date shall equal the excess, if any, of (I)
the sum of (a) the aggregate interest due on all Outstanding Notes included in
the Group III Series of Notes as of the Payment Date next succeeding such Due
Date, plus (b) an amount equal to all Carrying Charges for the Related Month
allocable to any Group III Series of Notes, over (II) the sum of (a) any Monthly
Variable Rent due on such Due Date plus (b) any Monthly Finance Rent due on such
Due Date, plus (c) any earnings on Permitted Investments allocated to any Group
III Series of Notes (less any portion thereof allocated to the Retained
Interestholder) accruing through the Determination Date occurring prior to such
Due Date and not included in the calculation of Availability Payments with
respect to any prior Due Date.
7
5.3 Payment of Monthly Supplemental Payments. On each Due Date, each
Lessee shall pay to the Lessor the Monthly Supplemental Payments that have
accrued during the Related Month with respect to the Financed Vehicles leased
hereunder by such Lessee, as provided in Sections 6 and 7 of Annex B.
5.4 Payment of Termination Payments, Casualty Payments, and Late
Return Payments. On each Due Date, each Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments that have
accrued with respect to the Acquired Vehicles leased hereunder by such Lessee,
as provided in Sections 7, 12.3 and 13, respectively.
5.5 Late Payment. In the event a Lessee fails to remit payment of any
amount due under this Lease on or before the Due Date, the amount not paid will
be considered delinquent and such Lessee will pay a late charge equal to the
product of (a) the VFR plus 1%, times (b) the delinquent amount for the period
from the Due Date to the date on which such delinquent amount is received by the
Trustee, times (c) the actual number of days elapsed during such period divided
by 360.
SECTION 6. INSURANCE.
6.1 Fleet Insurance. Each Lessee shall at all times maintain or cause
to be maintained, with financially sound and reputable insurers, (a) personal
injury and damage insurance with respect to the Vehicles leased by such Lessee
hereunder, and (b) insurance with respect to properties and business against
loss or damage of the kinds customarily insured against by corporations of
established reputation engaged in the same or similar businesses and similarly
situated, of such types and in such amounts as are customarily carried under
similar circumstances by such other corporations. Each Lessee may, in lieu of
maintaining such insurance with insurers, self-insure.
6.2 Information. Each Lessee shall, from time to time upon the
Lessor's or the Trustee's reasonable request, deliver to the Lessor and the
Trustee copies of certificates describing all insurance required by Section 6.1
which is then in effect.
SECTION 7. CASUALTY OBLIGATION. If a Vehicle becomes a Casualty,
then the applicable Lessee shall (a) promptly notify the Lessor of such
occurrence, and (b) in the case of an Acquired Vehicle, on the Due Date next
succeeding the last day of the Related Month in which the Lessee obtains actual
knowledge that such Vehicle has become a Casualty, pay to the Lessor an amount
(a "Casualty Payment") equal to the Net Book Value of such Vehicle, calculated
as of the earlier of the last day of such Related Month and the date such
vehicle is disposed of or becomes a Casualty, as applicable. Upon payment by the
applicable Lessee to the Lessor in accordance herewith of the Casualty Payment
for any Acquired Vehicle that has become a Casualty, (i) the Lessor shall cause
title to such Vehicle to be transferred to such Lessee to facilitate liquidation
of such Vehicle by such Lessee, (ii) such Lessee shall be entitled to any
physical damage insurance proceeds applicable to such Acquired Vehicle (if at
such time such Lessee carries such insurance coverage), and (iii) the Lien of
the Master Collateral Agent on such Vehicle shall be released thereby.
8
SECTION 8. VEHICLE USE. So long as no Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of Default (or any
similar event under any Supplement to the Base Indenture relating to a Group III
Series of Notes) has occurred, the Lessees may use Vehicles leased hereunder in
the regular course of their respective businesses, including subleasing such
Vehicles to Eligible Franchisees pursuant to Lessee Agreements, including
Subleases, used in the ordinary course of Lessees' businesses. Notwithstanding
any such Lessee Agreement, the applicable Lessee shall remain fully liable for
its obligations under this Lease and the other Related Documents (including any
obligation hereunder or thereunder that it may cause any Franchisee to perform
or fulfill). Each Lessee shall cause all payments under the Lessee Agreements,
to the extent such payments relate to vehicles comprising the Master Collateral,
to be deposited directly into the Master Collateral Account, and upon the
occurrence and during the continuance of a Lease Event of Default, Liquidation
Event of Default or Limited Liquidation Event of Default [(or any similar event
under any Supplement to the Base Indenture relating to a Group III Series of
Notes)], the Master Servicer shall promptly specify to the Master Collateral
Agent the allocation of such payments among Financing Sources. Vehicle use shall
be confined primarily to the United States, with limited use outside the United
States; provided, however, that the principal place of business or rental office
of the Eligible Franchisee with respect to any Vehicles used outside the United
States shall be located in the United States. Each Lessee shall promptly and
duly execute, deliver, file and record all such documents, statements, filings
and registrations, and take such further actions as the Lessor, the Master
Collateral Agent, the Master Servicer or the Trustee shall from time to time
reasonably request in order to establish, perfect and maintain the Lessor's
title to and interest in the Acquired Vehicles and the related Certificates of
Title as against such Lessee or any third party in any applicable jurisdiction
and to establish, perfect and maintain the Master Collateral Agent's Lien on the
Vehicles and the related Certificates of Title as a perfected lien in any
applicable jurisdiction. Each Lessee may, at such Lessee's sole expense, change
the place of principal location of any Vehicles. After any such change of
location, the applicable Lessee shall take all actions necessary (i) to maintain
the Lien of the Master Collateral Agent on such Vehicles and the Certificates of
Title with respect to such Vehicles, and (ii) to meet or obtain all material
legal requirements applicable to such Vehicles. Following a Lease Event of
Default or Manufacturer Event of Default, and upon the Lessor's request, each
Lessee shall advise the Lessor in writing where all Vehicles leased by such
Lessee hereunder as of such date are principally located. The Lessees shall not
knowingly use any Vehicles, or knowingly permit the same to be used, for any
unlawful purpose. The Lessees shall and shall require the related Franchisees to
use reasonable precautions to prevent loss or damage to Vehicles. The Lessees
shall or shall cause the related Franchisees to comply with all applicable
statutes, decrees, ordinances and regulations regarding acquiring, titling,
registering, leasing, insuring and disposing of Vehicles and shall or shall
require such related Franchisees to take reasonable steps to ensure that
operators are licensed. The Lessees shall or shall cause the related Franchisees
to perform, at its or their own expense, such vehicle preparation and
conditioning services with respect to Vehicles as are customary. The Lessor, the
Master Collateral Agent or the Trustee or any authorized representative of the
Lessor, the Master Collateral Agent or the Trustee may during reasonable
business hours from time to time, without disruption of the applicable Lessee's
or the related Franchisee's business, subject to applicable law, inspect
Vehicles and registration certificates, Certificates of Title and related
documents covering Vehicles wherever the same be located.
9
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND
FINES. Each Lessee, at its expense, shall be responsible for proper registration
and licensing of the Vehicles leased by it hereunder, and the titling of such
Vehicles in the name of the Lessor (in the case of Acquired Vehicles and Texas
Vehicles) or the Lessor or such Lessee, as applicable (in the case of Financed
Vehicles), in each case with the Lien of the Master Collateral Agent noted
thereon, and where required, each Lessee shall or shall cause the related
Franchisees to have Vehicles inspected by any appropriate governmental
authority; provided, however, that notwithstanding the foregoing, unless a
Liquidation Event of Default shall have occurred and be continuing, possession
of all Certificates of Title shall remain with each Servicer of the related
Vehicles or the Master Servicer with such Certificates of Title to be held in
trust, as agent of and custodian for the Master Collateral Agent. Each Lessee
shall pay or cause to be paid all registration fees, title fees, license fees,
traffic summonses, penalties, judgments and fines incurred with respect to any
Vehicle leased hereunder by such Lessee during the Vehicle Term for such Vehicle
or imposed during the Vehicle Term for such Vehicle by any governmental
authority or any court of law or equity with respect to Vehicles in connection
with the Lessee's operation of Vehicles, and any such amounts paid by the
Lessor, in its discretion, on such Lessee's behalf will be reimbursed within
thirty (30) days of the Lessor notifying the Lessee of such payment. The Lessor
agrees to execute a power of attorney substantially in the form of Attachment B
hereto (a "Power of Attorney"), and such other documents as may be necessary in
order to allow each Lessee to title, register and dispose of the Acquired
Vehicles and Texas Vehicles leased by such Lessee hereunder; and each Lessee
acknowledges and agrees that with respect to the Acquired Vehicles, it has no
right, title or interest in or with respect to any Certificate of Title.
Notwithstanding anything herein to the contrary, the Lessor may terminate such
Power of Attorney as provided in Section 17.3.
SECTION 10. MAINTENANCE AND REPAIRS. Each Lessee shall or shall
cause the related Franchisees, as applicable, to pay for all maintenance and
repairs to keep the Vehicles leased by such Lessee hereunder in good working
order and condition, and shall or shall cause such Franchisees to maintain such
Vehicles as required in order to keep the Manufacturer's warranty in force. Each
Lessee shall or shall cause the related Franchisees to return each Vehicle to an
authorized Manufacturer facility or the applicable Manufacturer's authorized
warranty station for warranty work. Each Lessee shall or shall cause the related
Franchisees to comply with any Manufacturer's recall of any Vehicle. Each Lessee
shall or shall cause the related Franchisees to pay, or cause to be paid, all
usual and routine expenses incurred in the use and operation of Vehicles
including, but not limited to, fuel, lubricants, and coolants. The Lessor, upon
thirty (30) days' prior written notice to the applicable Lessee, may pay any
such expenses that have not otherwise been paid by, or on behalf of, such Lessee
(including any failure by a related Franchisee to pay any such expenses), and
any expenses incurred by the Lessor on such Lessee's behalf for maintenance,
repair, operation or use of Vehicles by such Lessee will be promptly reimbursed
(in any event no later than the next monthly Due Date following such payment) by
such Lessee to the Lessor in the amount paid by the Lessor. Each Lessee shall
not make any material alterations to any Vehicles without the prior consent of
the Lessor. Any improvements or additions to any Acquired Vehicle shall become
and remain the property of the Lessor, except that any addition or improvement
to such a Vehicle made by a Lessee shall remain the property of such Lessee if
it can be disconnected or removed from the Vehicle without impairing the
functioning of or resale value thereof, other than any function or value
provided by such addition or improvement.
10
SECTION 11. VEHICLE WARRANTIES. If a Vehicle is covered by a
Manufacturer's warranty, the applicable Lessee and each related Franchisee,
during the Vehicle Term, shall have the right to make any claims under such
warranty which the Lessor could make. As provided in Section 2.4, the Lessor
makes no warranty or representation whatsoever, express or implied, with respect
to any Vehicle.
SECTION 12. VEHICLE USAGE REQUIREMENTS AND DISPOSITION.
12.1 Usage. As used herein, the term "vehicle turn-in condition" with
respect to each Program Vehicle leased hereunder by a Lessee means a set of
criteria for evaluating Program Vehicles upon their delivery at the end of the
applicable Vehicle Terms, which criteria will be determined in accordance with
the related Vehicle Disposition Program. Each Program Vehicle leased hereunder
by a Lessee not meeting the applicable Vehicle Disposition Program's vehicle
turn-in condition requirements will, unless redesignated as a Non-Program
Vehicle in accordance with Section 14, be purchased by such Lessee in accordance
with the Casualty procedure set forth in Section 7 or otherwise disposed of in
accordance with the late delivery procedure set forth in Section 13, as
applicable.
12.2 Disposition Procedure. Prior to the end of the Vehicle Term, each
Lessee will or will cause the related Franchisee to deliver each Program Vehicle
leased hereunder by such Lessee (other than a Casualty) to the nearest related
Manufacturer official auction or other facility designated by such Manufacturer
at such Lessee's sole expense and in accordance with the terms of the applicable
Vehicle Disposition Program. Any transportation allowance (for delivery costs)
and any rebates or credits applicable to the unexpired term of any license
plates for a Vehicle shall inure to the benefit of and, upon receipt thereof by
the Lessor, the Trustee or the Master Collateral Agent, shall promptly be paid
over to the applicable Lessee. Each Lessee will comply with the requirements of
law and the requirements of the Vehicle Disposition Programs in connection with,
among other things, the delivery of Certificates of Title, documents of transfer
signed as necessary, signed Condition Reports, and signed odometer statements
for the Program Vehicles.
12.3 Termination Payments. On the Due Date next succeeding the earlier
of (a) the last day of the Related Month in which the Repurchase Payment or the
Guaranteed Payment, as the case may be, from a Manufacturer pursuant to its
Vehicle Disposition Program with respect to any Acquired Vehicle that is a
Program Vehicle, is received by the Lessor, the Master Collateral Agent or the
Trustee (including by deposit into the Collection Account or the Master
Collateral Account), and (b) the thirtieth (30th) day after the expiration of
the Maximum Term for such Vehicle, the Lessee that leases such Vehicle hereunder
shall pay to the Lessor in respect of such Vehicle any Excess Damage Charges,
Excess Mileage Charges, early turnback surcharges and any other similar charges
and penalties (collectively, a "Program Vehicle Termination Payment") as
determined by the Manufacturer or its agent in accordance with the applicable
Vehicle Disposition Program; and on the Due Date next succeeding the earlier of
(i) the last day of the Related Month in which Disposition Proceeds from the
sale or other disposition of an Acquired Vehicle that is a Non-Program Vehicle,
but is not a Casualty, are received by the Lessor, the Master Collateral Agent
or the Trustee (including by deposit into the Collection Account or the Master
Collateral Account), and (ii) the thirtieth (30th) day after the date which is
twenty-four (24) months after the date of the original new dealer invoice for
such Vehicle, the applicable Lessee shall pay to the Lessor in respect of such
Vehicle an amount (a "Non-Program Vehicle Termination Payment") equal to the
quotient of (x) the sum of all Program Vehicle Termination Payments for the
Related Month in respect of Vehicles leased by such Lessee, divided by (y) the
number of Acquired Vehicles leased by such Lessee in respect of which such
Program Vehicle Termination Payments are payable (Program Vehicle Termination
Payments and Non-Program Vehicle Termination Payments being, collectively,
"Termination Payments"). The provisions of this Section 12.3 will survive the
expiration or earlier termination of the Term.
11
SECTION 13. LATE RETURN PAYMENTS. If an Acquired Vehicle which is a
Program Vehicle is not returned to the Manufacturer or accepted by the
Manufacturer in accordance with the related Vehicle Disposition Program prior to
the expiration of the Maximum Term for such Vehicle in accordance with Section
12.2, the Lessee of such Vehicle hereunder shall, unless such Vehicle has been
redesignated as a Non-Program Vehicle in accordance with Section 14, (a)
promptly notify the Lessor of its failure to return such Vehicle to the
Manufacturer or to sell such Vehicle in accordance with the applicable Auction
Procedures during the Vehicle Term, (b) use commercially reasonable efforts to
sell or otherwise dispose of such Vehicle in a manner reasonably likely to
maximize proceeds from such disposition and consistent with industry practice,
(c) cause the Disposition Proceeds, if any, from any such sale or disposition to
be paid to the Master Collateral Agent, in accordance with paragraph 10(d) of
Annex A, and (d) on the Due Date next succeeding the earlier of (i) the last day
of the Related Month in which such Disposition Proceeds are received by the
Lessor, the Master Collateral Agent or the Trustee (including by deposit into
the Collection Account or the Master Collateral Account), and (ii) the thirtieth
(30th) day after the expiration of the Maximum Term for such Vehicle, pay to the
Lessor an amount (a "Late Return Payment") equal to the excess of (x) the Net
Book Value of such Vehicle, calculated as of the first day of the calendar month
in which such Maximum Term expired reduced by the Depreciation Charges accrued
with respect to such Vehicle through the date such Maximum Term expired, over
(y) the dollar amount of such Disposition Proceeds (which Late Return Payment
amount may be equal to, but not less than, zero dollars). The foregoing shall
not affect the applicable Lessee's obligation to pay on the related Due Date all
Monthly Base Rent accrued with respect to each such Vehicle through the date on
which the Maximum Term for such Vehicle expires.
SECTION 14. REDESIGNATION OF VEHICLES (a) . (a) Upon a Program
Vehicle's becoming ineligible for repurchase by its Manufacturer or for sale in
accordance with applicable Auction Procedures, due to physical damage, repair
charges or accrued mileage, in each case in excess of that permitted under the
related Vehicle Disposition Program, or due to any failure or inability to
return such Vehicle to the Manufacturer or the designated auction site prior to
the expiration of the Maximum Term, or due to any other event or circumstance,
the applicable Servicer may designate such Vehicle as a Non-Program Vehicle if
such Vehicle, as a Non-Program Vehicle, will be an Eligible Vehicle and if
either (a) such designation meets the conditions of Section 4.2 or (b) the
Noteholders holding the requisite Invested Amount of each applicable Series of
Notes included in the Group III Series of Notes waive, in each case as and to
the extent permitted under the related Series Supplement, the requirements of
Section 4.2 as applied to this Section 14 and all such other conditions,
requirements or restrictions with respect to which a failure or violation has
occurred; provided, in each case, that (x) any additional Monthly Base Rent due
with respect to each such Vehicle, relating to the decrease, if any, of the Net
Book Value of such Vehicle under the newly applicable Depreciation Schedule,
shall be paid by the applicable Lessee on the next succeeding Due Date, and (y)
the minimum level of Enhancement required under the applicable Supplement, after
giving effect to such designation, shall be satisfied on the date of
designation.
12
(b) The applicable Servicer may designate a Non-Program Vehicle as a
Program Vehicle; provided, however, that (i) upon such redesignation and through
and including the applicable Vehicle Lease Expiration Date, such Vehicle shall
be an Eligible Vehicle, (ii) such Vehicle qualifies as an Eligible Vehicle under
the applicable Eligible Vehicle Disposition Program, (iii) the Capitalized Cost,
Net Book Value and Depreciation Charges with respect to such Vehicle shall be
recalculated as of the date of such redesignation as if such Vehicle was a
Program Vehicle at the time of the initial related Vehicle Lease Commencement
Date, and (iv) the related Manufacturer has acknowledged such designation. Upon
any redesignation of a Vehicle pursuant to this Section 14(b), (x) the Lessor
shall advance to the applicable Manufacturer the difference (if any) between the
original Capitalized Cost of such Vehicle and the Capitalized Cost of such
Vehicle upon redesignation, which amount shall be deemed to be part of the
Initial Acquisition Cost of such Vehicle and (y) the applicable Lessee shall be
entitled to a credit against the Monthly Base Rent due on the next succeeding
Due Date in an amount equal to the excess (if any) of the Net Book Value of such
Vehicle upon such redesignation over the original Net Book Value of such Vehicle
immediately prior to such redesignation.
SECTION 15. GENERAL INDEMNITY.
15.1 Indemnity of the Lessor. Each Lessee agrees to indemnify and hold
harmless the Lessor and the Lessor's directors, officers, agents and employees
(collectively, together with the Persons subject to indemnity under Section
15.2, the "Indemnified Persons") against any and all claims, demands and
liabilities of whatsoever nature, and all costs and expenses, relating to or in
any way arising out of:
15.1.1 the ordering, delivery, acquisition, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, re-registration, custody by such Lessee of title and
registration documents, use, non-use, misuse, operation, deficiency,
defect, transportation, repair, control or disposition of any Vehicle
leased hereunder or to be leased hereunder by such Lessee, including,
without limitation, any such Vehicle subleased to a Franchisee of such
Lessee and any of the foregoing actions, events or circumstances
occurring or arising in connection with such subleasing, any related
Lessee Agreement, any related Franchisee or any customer of any such
related Franchisee. The foregoing shall include, without limitation,
any claim by any third party against the Lessee for personal injury,
property or other damages arising out of any of the foregoing with
respect to any such Vehicles;
13
15.1.2 all (i) federal, state, county, municipal, foreign or
other fees and taxes of any nature, including but not limited to
license, qualification, registration, franchise, sales, use, gross
receipts, ad valorem, business, property (real or personal), excise,
motor vehicle, and occupation fees and taxes, and all federal, state,
local and foreign income taxes (including any taxes payable by the
Lessor as a result of its being a member of any group of corporations,
including such Lessee, that file any tax returns on a consolidated or
combined basis), and penalties and interest thereon, whether assessed,
levied against or payable by the Lessor or otherwise, with respect to
any Vehicle leased by such Lessee hereunder or the acquisition,
purchase, sale, lease, sublease, rental, use, operation, control,
ownership or disposition of any such Vehicle by any Person or measured
in any way by the value thereof or by the business of, investment by,
or ownership by the Lessor or such Lessee with respect thereto, and
(ii) documentary, stamp, filing, recording, mortgage or other taxes, if
any, which may be payable by the Lessor or such Lessee in connection
with this Lease or the other Related Documents or the related Lessee
Agreements and any penalties or interest with respect thereto;
15.1.3 any violation by such Lessee of this Lease or of any
Related Documents or Lessee Agreements to which such Lessee is a party
or by which it is bound or any laws, rules, regulations, orders, writs,
injunctions, decrees, consents, approvals, exemptions, authorizations,
licenses and withholdings of objecting of any governmental or public
body or authority and all other requirements having the force of law
applicable at any time to any Vehicle Leased by such Lessee hereunder
or any action or transaction by such Lessee with respect thereto or
pursuant to this Lease;
15.1.4 such Lessee's Pro Rata Share of all out-of-pocket costs
of the Lessor (including the reasonable fees and out-of-pocket expenses
of counsel for the Lessor) in connection with the execution, delivery
and performance of this Lease and the other Related Documents,
including, without limitation, overhead expenses and any and all fees
of the Trustee, Paying Agent, Clearing Agencies, Qualified Intermediary
and Master Collateral Agent, all fees payable in connection with any
Enhancement, any and all fees of the Master Servicer or any Servicer
under the Indenture, fees and costs of the Qualified Intermediary and
in connection with the Escrow Account, and any underwriting or
placement agency fees incurred in connection with the sale of any Notes
included in the Group III Series of Notes, in each case to the extent
allocable to this Lease; and
15.1.5 such Lessee's Pro Rata Share of all out-of-pocket costs
and expenses (including reasonable attorneys' fees and legal expenses)
incurred by the Lessor, the Master Collateral Agent, the Trustee, the
Qualified Intermediary or the Group III Noteholders in connection with
the administration, enforcement, waiver or amendment of this Lease and
any other Related Documents, and all indemnification obligations of the
Lessor under the Related Documents.
14
Notwithstanding the foregoing, no Lessee shall have any duty to
indemnify any Indemnified Person for any consequential or punitive damages or
claims, demands, liabilities, costs, or expenses to the extent such claim,
demand, liability, cost or expense arises out of or is due to such Indemnified
Person's gross negligence or willful misconduct.
15.2 Indemnification of the Trustee. Each Lessee agrees to indemnify
and hold harmless the Trustee and the Trustee's officers, directors, agents and
employees against any and all or, in the case of clause (ii) below, such
Lessee's Pro Rata Share of all claims, demands and liabilities of whatsoever
nature, and all or, in the case of clause (ii) below, such Lessee's Pro Rata
Share of all costs and expenses, relating to or in any way arising out of: (i)
any acts or omissions of such Lessee pursuant to this Lease and (ii) the
Trustee's appointment under the Base Indenture and the Trustee's performance of
its obligations thereunder, or any document pertaining to any of the foregoing
to which the Trustee is a signatory, including, but not limited to any judgment,
award, settlement, reasonable attorneys' fees and other costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim; provided, however, the Lessees shall have no duty to
indemnify the Trustee, or any other Indemnified Person pursuant to this Section
15.2, to the extent such claim, demand, liability, cost or expense arises out of
or is due to the Trustee's or such Indemnified Person's gross negligence or
willful misconduct. Any such indemnification shall not be payable from the
assets of the Lessor. The provisions of this indemnity shall run directly to and
be enforceable by the Trustee or any other Indemnified Person subject to the
limitations hereof. The indemnification provided for in this Section 15.2 shall
be in addition to any other indemnities available to the Trustee and shall
survive the termination of the duties of the Lessees hereunder and the
termination of this Lease or a document to which the Trustee is a signatory or
the resignation or removal of the Trustee.
15.3 Reimbursement Obligation by the Lessees. The applicable Lessee
shall forthwith upon demand reimburse the Lessor or the Trustee, as the case may
be, for any sum or sums expended with respect to any of the foregoing, or shall
pay such amounts directly upon request from the Lessor or the Trustee; provided,
however, that, if so requested by such Lessee, the Lessor or the Trustee shall
submit to such Lessee a statement documenting any such demand for reimbursement
or prepayment. To the extent that such Lessee in fact indemnifies the Lessor or
the Trustee under the indemnity provisions of this Lease, such Lessee shall be
subrogated to the rights of the Lessor or the Trustee, as the case may be, in
the affected transaction and shall have a right to determine the settlement of
claims therein. The foregoing indemnity as contained in this Section 15 shall
survive the expiration or earlier termination of this Lease or any lease of any
Vehicle hereunder; provided, however, that the factual or legal circumstances
giving rise to the Lessor's exposure to liability occur during the period that
the Lease is in effect as to the Vehicle for which such exposure to liability
arose.
15.4 Notice to Lessee of Claims. The Lessor or the Trustee, as the
case may be, shall notify the applicable Lessee in writing (a "Notice of Claim")
of the pendency of any such claim, action or facts referred to in this Section
15 for which indemnity may be required.
15.5 Defense of Claims. Defense of any claim referred to in this
Section 15 for which indemnity may be required shall, at the option and request
of the applicable Lessee, be conducted by such Lessee. Following receipt of any
Notice of Claim, such applicable Lessee will inform the Indemnified Person of
its election to defend such claim. Such Indemnified Person may participate in
any such defense at its own expense, provided such participation does not
interfere with such Lessee's defense. Each Lessee agrees that no Indemnified
Person will be liable to such Lessee for any claim caused directly or indirectly
by the inadequacy of any Vehicle for any purpose or any deficiency or defect
therein or the use or maintenance thereof or any repairs, servicing or
adjustments thereto or any delay in providing or failure to provide such or any
interruption or loss of service or use thereof or any loss of business, all of
which shall be the risk and responsibility of such Lessee, except to the extent
that any of the foregoing is caused by the gross negligence or willful
misconduct of such Indemnified Person. The rights and indemnities of each
Indemnified Person hereunder are expressly made for the benefit of, and will be
enforceable by, each Indemnified Person notwithstanding the fact that such
Indemnified Person is not or is no longer a party to (or entitled to receive the
benefits of) this Lease. This general indemnity shall not affect any claims of
the type discussed above which a Lessee may have against the Manufacturer.
15
SECTION 16. ASSIGNMENT. No Lessee shall, except as provided in the
Base Indenture, without prior written consent of the Lessor and the Trustee,
assign this Lease or any of its rights hereunder to any other party; provided,
however, a Lessee may sublease or rent Vehicles leased by it under the terms of
such Lessee's normal Sublease agreements to Eligible Franchisees, and such
Lessee and such Eligible Franchisees may rent such Vehicles to consumers in the
ordinary course of their daily rental business. Any purported assignment in
violation of this Section 16 shall be void and of no force or effect. Nothing
contained herein shall be deemed to restrict the right of a Lessee to acquire or
dispose of, by purchase, lease, financing, or otherwise, motor vehicles that are
not subject to the provisions of this Lease.
SECTION 17. DEFAULT AND REMEDIES THEREFOR.
17.1 Lease Events of Default. Any one or more of the following will
constitute an event of default (a "Lease Event of Default") as that term is used
herein:
17.1.1 there occurs a default in the payment of any Monthly
Base Rent, Monthly Variable Rent, Monthly Finance Rent, Termination
Payment, Casualty Payment, Late Return Payment, Monthly Supplemental
Payment, Availability Payment or other amount payable under this Lease,
and the continuance thereof for five (5) Business Days with respect to
any payment of Monthly Base Rent or five (5) Business Days with respect
to any other amounts, in each case after notice thereof by the Lessor,
the Master Collateral Agent or the Trustee to the applicable Lessee and
the Guarantor;
17.1.2 any unauthorized assignment or transfer of this Lease by
a Lessee or the Guarantor occurs;
17.1.3 the failure of a Lessee or the Guarantor to observe or
perform any other covenant, condition, agreement or provision hereof,
which failure has a Material Adverse Effect on the Lessor, and such
default continues for more than sixty (60) days after the earlier to
occur of (a) the date a Responsible Officer of such Lessee obtains
knowledge of such default or (b) the date written notice thereof is
delivered by the Lessor, the Master Collateral Agent or the Trustee to
such Lessee; provided, however, that if such failure cannot reasonably
be cured within such sixty (60) day period, no Lease Event of Default
shall result therefrom so long as, within such sixty (60) day period,
such Lessee (i) commences to cure same, (ii) delivers written notice to
the Lessor, the Master Collateral Agent and the Trustee notifying the
Lessor, the Master Collateral Agent and the Trustee of such default and
setting forth the steps such Lessee intends to take in order to cure
such default and (iii) thereafter diligently prosecutes such cure to
completion and completely cures such default on or before the ninetieth
(90th) day after the earlier of the dates set forth in clause (a) and
clause (b) above;
16
17.1.4 if any representation or warranty made by a Lessee or
the Guarantor proves untrue in any respect as of the date of the
issuance or making thereof, which inaccuracy or falsehood has a
Material Adverse Effect on the Lessor, and such inaccuracy or falsehood
is not cured within sixty (60) days after notice thereof from the
Lessor, the Master Collateral Agent or the Trustee to such Lessee; or
17.1.5 an Event of Bankruptcy occurs with respect to a Lessee
or the Guarantor.
17.2 Effect of Lease Event of Default. If (i) a Lease Event of Default
described in Section 17.1.1(i), 17.1.2 or 17.1.5 shall occur, then the Monthly
Base Rent, the Monthly Supplemental Payment and Casualty Payments (in each case
calculated as if all Vehicles had become a Casualty for the Related Month), the
Monthly Variable Rent, the Availability Payment and the Monthly Finance Rent (in
each case calculated as if the full amount of interest, principal and other
charges under all Outstanding Series of Notes included in the Group III Series
of Notes were then due and payable in full), Termination Payments and Late
Return Payments shall, automatically, without further action by the Lessor or
the Trustee, become immediately due and payable or (ii) any other Lease Event of
Default or any Liquidation Event of Default shall occur, the Lessor or the
Trustee may declare the Rent and all other charges and payments (calculated as
described in clause (i) above) to be due and payable, whereupon such Rent and
such other charges and payments (as so calculated) shall, subject to Section
17.5, become immediately due and payable.
17.3 Rights of Lessor Upon Lease Event of Default, Liquidation Event.
of Default or Limited Liquidation Event of Default. If a Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of Default shall
occur, then the Lessor at its option may:
(i) Proceed by appropriate court action or actions, either at
law or in equity, to enforce performance by the Lessees of the
applicable covenants and terms of this Lease or to recover damages for
the breach hereof calculated in accordance with Section 17.5; or
(ii) By notice in writing to each Lessee, terminate this Lease
in its entirety and/or the right of possession hereunder of the Lessees
as to the Vehicles, and the Lessor may direct delivery by the Lessees
of documents of title to the Vehicles, whereupon all rights and
interests of the Lessees to the Vehicles (except as otherwise provided
herein) will cease and terminate (but the Lessees will remain liable
hereunder as herein provided, calculated in accordance with Section
17.5); and thereupon, the Lessor or its agents may, subject in each
case to the rights of the Franchisees under the applicable Subleases,
peaceably enter upon the premises of the Lessees or other premises
where the Vehicles may be located and take possession of them and
thenceforth hold, possess and enjoy the same free from any right of the
Lessees, or their successors or assigns (other than the Franchisees),
to employ the Vehicles for any purpose whatsoever consistent with the
mitigation of losses and damages, and the Lessor will, nevertheless,
have a right to recover from the Lessees any and all amounts which
under the terms of Section 17.2 (as limited by Section 17.5) of this
Lease may be then due. The Lessor will provide the applicable Lessee
with written notice of the place and time of any sale of Financed
Vehicles pursuant to this Section 17.3 at least five (5) days prior to
the proposed sale, which shall be deemed commercially reasonable, and
such Lessee or the Lessor may purchase the Vehicle(s) at the sale. Each
and every power and remedy hereby specifically given to the Lessor will
be in addition to every other power and remedy hereby specifically
given or now or hereafter existing at law, in equity or in bankruptcy
and each and every power and remedy may be exercised from time to time
and simultaneously and as often and in such order as may be deemed
expedient by the Lessor; provided, however, that the measure of damages
recoverable against a Lessee will in any case be calculated in
accordance with Section 17.5. All such powers and remedies will be
cumulative, and the exercise of one will not be deemed a waiver of the
right to exercise any other or others. No delay or omission of the
Lessor in the exercise of any such power or remedy and no renewal or
extension of any payments due hereunder will impair any such power or
remedy or will be construed to be a waiver of any default or any
acquiescence therein. Any extension of time for payment hereunder or
other indulgence duly granted to a Lessee will not otherwise alter or
affect the Lessor's rights or the obligations hereunder of such Lessee.
The Lessor's acceptance of any payment after it will have become due
hereunder will not be deemed to alter or affect the Lessor's rights
hereunder with respect to any subsequent payments or defaults therein;
or
17
(iii) By notice in writing to a Lessee, terminate the Power of
Attorney of such Lessee.
17.4 Rights of Trustee Upon Liquidation Event of Default, Limited
Liquidation Event of Default, Manufacturer Event of Default and Non-Performance
of Certain Covenants.
(i) If a Liquidation Event of Default or a Limited Liquidation
Event of Default or, with respect to Program Vehicles, a Manufacturer
Event of Default, shall have occurred and be continuing, the Lessor and
the Trustee, to the extent provided in the Indenture, shall have the
rights against the Guarantor, each Lessee, each Manufacturer in
connection with any Manufacturer Event of Default and the Master Lease
Collateral provided in the Indenture (including, without limitation, in
connection with a Manufacturer Event of Default, the rights granted
under Section 8.2 of the Indenture) upon a Liquidation Event of Default
or Limited Liquidation Event of Default, including the right to take
possession of all Group III Vehicles immediately from the Lessees.
(ii) With respect to Program Vehicles, if the Guarantor or any
Lessee shall default in the due performance and observance of any of
its obligations under Section 6.1, 23.4, 24.3, 24.4(f), 24.7 or 25.4
hereof, and such default shall continue unremedied for a period of 30
days after notice thereof shall have been given to the Guarantor or the
applicable Lessee, as the case may be, by the Lessor, the Lessor or the
Trustee, as assignee of the Lessor's rights hereunder, shall have the
ability to exercise all rights, remedies, powers, privileges and claims
of the Guarantor or any Lessee against the Manufacturers under or in
connection with the Eligible Vehicle Disposition Programs with respect
to (i) Group III Vehicles that are Program Vehicles which the Guarantor
or any Lessee has determined to turn back to the Manufacturers under
such Eligible Vehicle Disposition Programs and (ii) whether or not the
Guarantor or any Lessee shall then have determined to turn back such
Group III Vehicles that are Program Vehicles, any such Program Vehicles
for which the applicable Maximum Term will expire within one week or
less.
18
(iii) Upon a default in the performance (after giving effect to
any grace periods provided herein) by the Guarantor or any Lessee of
its obligations hereunder to keep the Group III Vehicles free of Liens
and to maintain the Trustee's Lien perfected on the Master Lease
Collateral, the Trustee shall have the right to take actions reasonably
necessary to correct such default with respect to the subject Vehicles
including the execution of UCC financing statements with respect to
Eligible Vehicle Disposition Program and other general intangibles, and
the completion of Vehicle Perfection and Documentation Requirements on
behalf of the Guarantor or any Lessee, as applicable.
(iv) Upon the occurrence of a Liquidation Event of Default or
Limited Liquidation Event of Default, the Guarantor and each Lessee
will return any Group III Vehicles that are Program Vehicles to the
related Manufacturer in accordance with the instructions of the Lessor.
(v) Upon the occurrence of a Liquidation Event of Default or
Limited Liquidation Event of Default, the Lessor shall have the right
to dispose of (x) those Group III Vehicles that are Program Vehicles
not accepted by the related Manufacturer under the applicable Eligible
Program pursuant to clause (iv) above and (y) the Group III Vehicles
that are Non-Program Vehicles and to direct the Guarantor or the
applicable Lessee to dispose of such Vehicles in accordance with its
instructions. In addition, the Lessor shall have all of the rights,
remedies, powers, privileges and claims vis-a-vis the Guarantor or any
Lessee, necessary or desirable to allow the Trustee to exercise the
rights, remedies, powers, privileges and claims given to the Trustee
pursuant to Section 8.1 and, with respect to Program Vehicles, Section
8.2 of the Base Indenture and the Guarantor and each Lessee
acknowledges that it has hereby granted to the Lessor all of the
rights, remedies, powers, privileges and claims granted to the Trustee
pursuant to Article 8 of the Base Indenture and that, under certain
circumstances set forth in the Base Indenture, the Trustee may act in
lieu of the Lessor in the exercise of such rights, remedies, powers,
privileges and claims.
17.5 Measure of Damages. If a Lease Event of Default, Liquidation
Event of Default or Limited Liquidation Event of Default occurs and the Lessor,
the Master Collateral Agent or the Trustee exercises the remedies granted to the
Lessor, the Master Collateral Agent or the Trustee under this Section 17 or
under Section 8.2 of the Base Indenture, the amount that the Lessor shall be
permitted to recover shall be equal to:
19
(i) all Rent and payments under this Lease (calculated as
provided in Section 17.2); plus
(ii) any damages and expenses (other than punitive and
consequential damages), which the Lessor, the Master Collateral Agent
or the Trustee will have sustained by reason of the Lease Event of
Default, Liquidation Event of Default or Limited Liquidation Event of
Default, together with reasonable sums for such attorneys' fees and
such expenses as will be expended or incurred in the seizure, storage,
rental or sale of the Vehicles or in the enforcement of any right or
privilege hereunder or in any consultation or action in such
connection; plus
(iii) all other amounts due and payable under this Lease; plus
(iv) interest from time to time on amounts due and unpaid
under this Lease at the VFR plus 1%, computed from the date of the
Lease Event of Default, Liquidation Event of Default or Limited
Liquidation Event of Default or the date payments were originally due
the Lessor under this Lease or from the date of each expenditure by the
Lessor which is recoverable from a Lessee pursuant to this Section 17,
as applicable, to and including the date payments are made by the
Lessee; minus
(v) an amount equal to all sums realized by the Lessor, the
Master Collateral Agent and the Trustee from the liquidation of the
Financed Vehicles (other than a Texas Vehicle) leased hereunder (either
by receipt of payment from the Manufacturers under Vehicle Disposition
Programs, from sales of Vehicles to third parties, or otherwise),
provided, however, that if a Financed Vehicle (other than a Texas
Vehicle) is delivered to the Manufacturer or the designated auction
site for repurchase by the Manufacturer under the applicable Vehicle
Disposition Program or for sale in accordance with the applicable
Auction Procedures, respectively, and such Vehicle is accepted for
repurchase or sale by such Manufacturer (as evidenced by a Condition
Report indicating that such Vehicle conforms to the requirements for
repurchase or sale under such Vehicle Disposition Program), the Lessor
and the Trustee shall be deemed to have received thirty (30) days after
the date of such acceptance or sale on account of this clause (v) an
amount equal to the Net Book Value of such Vehicle, calculated as of
its Disposition Date (less any Termination Payments payable in respect
of such Vehicle).
17.6 Application of Proceeds. The proceeds of any sale or other
disposition of any Financed Vehicles pursuant to Section 17.3 shall be applied
in the following order: (i) to the reasonable costs and expenses incurred by the
Lessor in connection with such sale or disposition, including any reasonable
costs associated with repairing such Vehicles, and reasonable attorneys' fees in
connection with the enforcement of this Lease, (ii) to the payment of
outstanding Rent owing from the applicable Lessee and payments under the Lease
owing from such Lessee (such proceeds to be applied first, to outstanding
Monthly Variable Rent and Monthly Finance Rent pro rata, second, to outstanding
Availability Payments, third, to outstanding Base Rent and Monthly Supplemental
Payments pro rata, fourth, to outstanding Termination Payments, Casualty
Payments and Late Return Payments pro rata and fifth, to outstanding late
charges pursuant to Sections 5.5 and 17.5(iv)), (iii) to the payment of all
other amounts due hereunder from such Lessee, (iv) to the payment of any amounts
to the Lessor, or such Person(s) as may be lawfully entitled thereto, and (v)
any remaining proceeds to such Lessee.
20
SECTION 18. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of
any of the following events (each, a "Manufacturer Event of Default") with
respect to a Manufacturer, the Lessees on behalf of the Lessor (a) shall no
longer place Vehicle Orders for additional Program Vehicles from such
Manufacturer (each, a "Defaulting Manufacturer") and (b) shall cancel any
Vehicle Order with such Defaulting Manufacturer to which a vehicle
identification number (a "VIN") has not been assigned as of the date such
Manufacturer Event of Default occurs:
Section 18.1. The failure of such Manufacturer to pay Guaranteed
Payments, Repurchase Payments and/or Incentive Payments due under, respectively,
such Manufacturer's Vehicle Disposition Programs and its incentive programs, in
an aggregate amount in excess of $25,000,000 (net of amounts that are the
subject of a good faith dispute, as evidenced in writing by either the
applicable Lessee or the Manufacturer questioning the accuracy of the amounts
paid or payable in respect of any such Vehicle Disposition Programs or incentive
programs), which failure, in the case of each such Guaranteed Payment,
Repurchase Payment and/or Incentive Payment included in such amount in excess of
$25,000,000 continues for more than ninety (90)days following the Disposition
Date for the related Vehicle.
Section 18.2. The occurrence of an Event of Bankruptcy with respect to
such Manufacturer.
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE. Pursuant to
Section 7701 of the Code and as set forth in Attachment C hereto, each Lessee
will warrant and certify that (1) such Lessee intends to use the Acquired
Vehicles in a trade or business of such Lessee, and (2) such Lessee has been
advised that it will not be treated as the owner of the Acquired Vehicles for
federal income tax purposes.
SECTION 20. SURVIVAL. In the event that, during the term of this
Lease, a Lessee becomes liable for the payment or reimbursement of any
obligations, claims or taxes pursuant to any provision hereof, such liability
will continue, notwithstanding the expiration or termination of this Lease,
until all such amounts are paid or reimbursed by such Lessee.
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND
TRUSTEE. Notwithstanding anything to the contrary contained in this Lease, each
Lessee and the Guarantor acknowledges that each of the Lessees and the Lessor,
pursuant to the Master Collateral Agency Agreement, has granted a security
interest to the Master Collateral Agent, for the benefit of the Beneficiaries
specified therein, in all of its right, title and interest in, to and under the
Vehicles, the related Vehicle Disposition Programs, the Master Collateral
Account and all other Master Collateral specified in the Master Collateral
Agency Agreement as being pledged by Thrifty, Dollar and RCFC, and each Lessee
and the Guarantor further acknowledges that the Lessor, pursuant to the
Indenture, has granted a security interest to the Trustee in all of its right,
title and interest in, to and under the RCFC Agreements, the Collection Account
and the other Collateral described in the Indenture. Accordingly, each Lessee
and the Guarantor agrees that:
21
(i) Subject to the terms of the Indenture, the Trustee shall
have all the rights, powers, privileges and remedies of the Lessor
hereunder. Specifically, each Lessee and the Guarantor agrees that,
upon the occurrence of an Amortization Event, the Trustee or, with
respect to any Master Collateral, the Master Collateral Agent (for and
on behalf of the Trustee) may exercise any right or remedy against each
Lessee or the Guarantor provided for herein or in the Indenture or the
Master Collateral Agency Agreement and none of the Lessees or the
Guarantor will interpose as a defense that such claim should have been
asserted by the Lessor;
(ii) Upon the delivery by the Master Collateral Agent or the
Trustee of any notice to a Lessee or the Guarantor stating that a Lease
Event of Default or an Amortization Event with respect to such Lessee
has occurred, then such Lessee or the Guarantor will, if so requested
by the Master Collateral Agent (with respect to the Master Collateral)
or the Trustee (with respect to the Collateral), treat the Master
Collateral Agent or the Trustee or the Master Collateral Agent's or the
Trustee's designee, as the case may be, for all purposes as the Lessor
hereunder and in all respects comply with all obligations under this
Lease that are asserted by the Master Collateral Agent or the Trustee
as the successor to the Lessor hereunder, irrespective of whether such
Lessee or the Guarantor has received any such notice from the Lessor;
(iii) Pursuant to the Indenture, the Lessor hereby irrevocably
authorizes and directs each Lessee to, and each Lessee shall, make
payments of Rent hereunder directly to the Trustee for deposit in the
Group III Collection Account established by the Trustee for receipt of
such payments pursuant to the Indenture, and such payments shall
discharge the obligation of such Lessee to the Lessor hereunder with
respect to Rent to the extent of such payments. Each Lessee further
acknowledges that pursuant to the Master Collateral Agency Agreement,
the Lessor has irrevocably authorized and directed such Lessee to, and
such Lessee shall, cause all payments under the related Lessee
Agreements, each Vehicle Disposition Programs, and all other Master
Collateral pledged by such Lessee to the Master Collateral Agent for
the benefit of the Trustee (as Beneficiary on behalf of the holders of
each Series of Notes included in the Group III Series of Notes), to be
made directly to the Master Collateral Agent for deposit in the Master
Collateral Account established by the Lessor for receipt of such
payments pursuant to the Master Collateral Agency Agreement, and each
such payment (other than any payment that is subject to distribution to
such Lessee or its designee pursuant to Section 2.5(b) of the Master
Collateral Agency Agreement and that is not transferred to the
Collection Account) shall constitute a prepayment in respect of the
obligation of such Lessee to pay the Rent due hereunder on the next
succeeding Due Date. Upon written notice to a Lessee of a sale or
assignment by the Trustee or Master Collateral Agent of its right,
title and interest in moneys due under this Lease or the Master
Collateral Agency Agreement to a successor Trustee or Master Collateral
Agent, such Lessee shall thereafter make payments of Rent hereunder or
payments in respect of the Master Collateral, as applicable, to the
party specified in such notice;
(iv) Upon request made by the Master Collateral Agent at any
time, each Lessee will take such actions as are requested by the Master
Collateral Agent to assist the Master Collateral Agent in maintaining
the Master Collateral Agent's perfected security interest in the
Vehicles leased by such Lessee under this Lease, the Certificates of
Title with respect thereto and the related Master Collateral pursuant
to the Master Collateral Agency Agreement; and
22
(v) A security interest in the Lessor's rights under this
Lease has been granted by the Lessor to the Trustee pursuant to the
Indenture as collateral security only for all Series of Notes included
in Group III and, accordingly, all references herein to "all" Series of
Notes shall refer only to all Series of Notes included in Group III.
SECTION 22. MODIFICATION AND SEVERABILITY. The terms of this Lease
will not be waived, altered, modified, amended, supplemented or terminated in
any manner whatsoever except by a written instrument signed by the Lessor, each
Lessee and (except as to matters referred to in Section 27.3) the Guarantor, and
consented to in writing by the Master Collateral Agent and the Trustee, the
Required Group III Noteholders and each Enhancement Provider with respect to
each Series of Notes included in Group III. If any part of this Lease is not
valid or enforceable according to law, all other parts will remain enforceable.
The Lessor shall provide prompt written notice to each Rating Agency of any such
waiver, modification or amendment.
Notwithstanding the foregoing provisions of this Section 22, the
Lessor, the Lessees and the Guarantor may, at any time and from time to time,
without the consent of the Master Collateral Agent, the Trustee, any Noteholders
or any Enhancement Provider, enter into any amendment, supplement or other
modification to this Lease to cure any apparent ambiguity or to correct or
supplement any provision in this Lease that may be inconsistent with any other
provision herein; provided, however, that (i) any such action shall not have a
Material Adverse Effect on the interests of any Enhancement Provider for a
Series of Notes included in the Group III Series of Notes, based upon, at the
request of the Trustee, an Opinion of Counsel and an officers' certificate of
the Lessor and each Lessee addressed to the Trustee and (ii) a copy of such
amendment, supplement or other modification is furnished to the Trustee, each
Enhancement Provider with respect to any Series of Notes included in the Group
III Series of Notes and each Rating Agency in accordance with the notice
provisions hereof not later than ten days prior to the execution thereof by the
Lessor, the Lessees and the Guarantor.
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES. Each Lessee and
Servicer represents and warrants to the Lessor, as to itself and the Vehicles
leased by it hereunder, and the Guarantor represents and warrants to the Lessor,
as to itself and as to each Lessee and Servicer, that as of the Closing Date
with respect to the Series 2001-1 Notes as the first Group III Series of Notes:
23.1 Due Incorporation, Authorization, No Conflicts, Etc. Each of the
Lessees and the Guarantor is a corporation duly incorporated and validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified and in good standing in each jurisdiction
where, because of the nature of its activities or properties, the failure so to
qualify would have a Material Adverse Effect on such Lessee or the Guarantor.
The execution, delivery and performance by each Lessee and the Guarantor of this
Lease and the other Related Documents to be executed and delivered by it are
within its corporate powers, have been duly authorized by all necessary
corporate action (including shareholder approval, if required), have received
all necessary governmental and other consents, approvals (in each case if any
shall be required), and do not and will not contravene or conflict with, or
create a default, breach, Lien or right of termination or acceleration under,
any Requirement of Law or Contractual Obligation binding upon it, other than
such default, breach, Lien or right of termination or acceleration which does
not have a Material Adverse Effect on such Lessee or the Guarantor, as
applicable. This Lease and each other Related Document to be executed and
delivered by a Lessee or the Guarantor are (or when executed and delivered will
be) the legal, valid, and binding obligations of such Person, enforceable
against such Person in accordance with their respective terms, subject to
bankruptcy, insolvency and other laws affecting the enforcement of creditors'
rights.
23
23.2 Financial Information; Financial Condition. All balance sheets,
all statements of operations, of shareholders' equity and of cash flow, and
other financial data which have been or shall hereafter be furnished to the
Lessor or the Trustee for the purposes of or in connection with this Lease or
the Related Documents have been and will be prepared in accordance with GAAP and
do and will present fairly the financial condition of the entities involved as
of the dates thereof and the results of their operations for the periods covered
thereby. Such financial data include the audited balance sheet of the Guarantor
and each Lessee as of December 31, 2000 and the related statements of
operations, stockholders' equity and cash flows for the fiscal year ended on
such date.
23.3 Litigation.Except for (i) claims set forth in Schedule 1 and (ii)
claims which are fully covered by insurance, no claims, litigation (including,
without limitation, derivative actions), arbitration, governmental investigation
or proceeding or inquiry is pending or, to the best of the Lessees' and the
Guarantor's knowledge, threatened against a Lessee or the Guarantor which would,
if adversely determined, have a Material Adverse Effect on a Lessee or the
Guarantor.
23.4 Liens. As of the date hereof, there is no Lien on, or no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in, the Vehicles leased hereunder (other than those set forth in Schedule
4, and other Permitted Liens).
23.5 Necessary Actions. Upon the Servicers causing the Lien of the
Master Collateral Agent to be noted on the Certificates of Title with respect to
the Vehicles or as otherwise provided for by the Master Collateral Agency
Agreement or the Indenture, all filings, registrations and recordings necessary
or appropriate to create, preserve, protect and perfect the security interest
granted to the Master Collateral Agent in respect of the Master Collateral have
been accomplished and, assuming the delivery to, and continuing possession by,
the Lessor or its agents or assignees of all instruments and documents (in each
case as defined in the UCC as in effect in New York) a security interest in
which is perfected by possession (except with regard to property constituting
fixtures, any reserved rights of the United States government as required by
law, Liens upon patents, patent licenses, trademarks, service marks and
trademark licenses, to the extent that such Liens cannot be perfected by the
filing of financing statements under the Uniform Commercial Code as in effect in
the applicable jurisdiction, Liens on uncertified securities and security
entitlements, Liens on Master Collateral the perfection of which requires
filings in or other actions under the laws of jurisdictions outside of the
United States of America, any State, territory or dependency thereof or the
District of Columbia, and Liens on general intangibles or accounts (in each case
as defined in the UCC as in effect in New York) on which the United States of
America or any department, agency, or instrumentality thereof is the obligor),
and assuming that the applicable Lessee has rights in the Master Collateral
within the meaning of the UCC as in effect in New York, the security interest
granted to the Master Collateral Agent pursuant to the Master Collateral Agency
Agreement in and to the Master Collateral constitutes a perfected security
interest therein (but as to the copyrights and copyright licenses and accounts
arising therefrom, only to the extent the UCC of the relevant jurisdiction, from
time to time in effect, is applicable), prior to the rights of all other Persons
(except, with respect to goods (as defined in the UCC), buyers in the ordinary
course of business to the extent provided in Section 9-307(1) of the UCC as from
time to time in effect in the applicable jurisdiction) therein and subject to no
other Liens other than Permitted Liens (and the interests of such buyers in the
ordinary course of business) and is entitled to all rights, priorities and
benefits afforded to perfected security interests by the UCC or other relevant
law as enacted in any relevant jurisdiction.
24
23.6 Employee Benefit Plans. (a) During the twelve consecutive month
period prior to the date hereof (or, with respect to each Series of Notes
included in the Group III Series of Notes after the Closing Date for the Series
2001-1 Notes, the Closing Date with respect to such Series of Notes): (i) no
steps have been taken to terminate any Pension Plan and (ii) no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a Lien under Section 302(f)(1) of ERISA in connection with such Pension Plan;
(b) no condition exists or event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by a Lessee, the Guarantor or
any member of the Controlled Group of fines, penalties or liabilities for ERISA
violations, which in the case of any of the events referred to in clause (a)
above or this clause (b) would have a Material Adverse Effect upon such Lessee
or the Guarantor, and (c) none of the Lessees and the Guarantor has any material
contingent liability with respect to any post-retirement benefits under a
Welfare Plan, other than liability for continuation coverage described in
Subtitle B of Part 6 of Title I of ERISA and liabilities which would not have a
Material Adverse Effect upon any Lessee or the Guarantor.
23.7 Investment Company Act. Neither the Guarantor nor any Lessee is
an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
23.8 Regulations T, U and X. Neither the Guarantor nor any Lessee is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T, U and X of the Board of Governors of the Federal
Reserve System).
23.9 Business Locations; Trade Names; Principal Places of Business
Locations. Schedule 3 lists each of the locations where each Lessee and the
Guarantor maintains a chief executive office, principal place of business, or
any records; and Schedule 3 also lists such Person's legal name, each name under
or by which it conducts its business, each state in which it conducts business
and the state in which the it has its principal place of business.
23.10 Taxes. Each Lessee and the Guarantor has filed all material tax
returns that are required to be filed by it, and has paid or provided adequate
reserves for the payment of all taxes, including, without limitation, all
payroll taxes and federal and state withholding taxes, and all assessments
payable by it that have become due, other than those that are not yet delinquent
or are being contested in good faith by appropriate proceedings and with respect
to which adequate reserves have been established, and are being maintained, in
accordance with GAAP. As of such Closing Date, there is no ongoing material
audit (other than routine sales tax audits and other routine audits) or, to each
Lessee's and the Guarantor's knowledge, material tax liability for any period
for which returns have been filed or were due, other than those contested in
good faith by appropriate proceedings and with respect to which (x) adequate
reserves have been established and are being maintained in accordance with GAAP
and (y) the failure to pay such taxes would not, individually or in the
aggregate, have a Material Adverse Effect on such Lessee or the Guarantor or a
material adverse effect on the Noteholders.
25
23.11 Governmental Authorization. Each of the Lessees and the Guarantor
has all licenses, franchises, permits and other governmental authorizations
necessary for all businesses presently carried on by it (including owning and
leasing the real and personal property owned and leased by it), except where
failure to obtain such licenses, franchises, permits and other governmental
authorizations would not have a Material Adverse Effect on such Person.
23.12 Compliance with Laws. Each Lessee and the Guarantor: (i) is not
in violation of any Requirement of Law, which violation would have a Material
Adverse Effect on such Person, and to the best knowledge of each Lessee and the
Guarantor, no such violation has been alleged; (ii) has filed in a timely manner
all reports, documents and other materials required to be filed by it with any
Governmental Agency (and the information contained in each of such filings is
true, correct and complete in all material respects), except where failure to
make such filings would not have a Material Adverse Effect on such Person; and
(iii) has retained all records and documents required to be retained by it
pursuant to any Requirement of Law, except where failure to retain such records
would not have a Material Adverse Effect on such Person.
23.13 Eligible Vehicles; Eligible Franchisees. Each Vehicle is or will
be, as the case may be, on the Vehicle Lease Commencement Date with respect to
such Vehicle, an Eligible Vehicle, and each Franchisee subleasing an Eligible
Vehicle from a Lessee is or will be, as the case may be, on the sublease
commencement date with respect to such Eligible Vehicle, an Eligible Franchisee.
23.14 Supplemental Documents True and Correct. All information
contained in any Vehicle Order, Refinancing Schedule or other Supplemental
Document which has been submitted, or which may hereafter be submitted by a
Lessee or the Guarantor to the Lessor is, or will be, true, correct and
complete.
23.15 Accuracy of Information. All certificates, reports, statements,
documents and other information furnished to the Lessor, the Trustee or the
Master Collateral Agent by the Guarantor or any Lessee pursuant to any provision
of any Related Document, or in connection with or pursuant to any amendment or
modification of, or waiver under, any Related Document, shall, at the time the
same are so furnished, be complete and correct in all material respects to the
extent necessary to give the Lessor, the Trustee or the Master Collateral Agent,
as the case may be, true and accurate knowledge of the subject matter thereof,
and the furnishing of the same to the Lessor, the Trustee or the Master
Collateral Agent, as the case may be, shall constitute a representation and
warranty by the Guarantor and such Lessee made on the date the same are
furnished to the Lessor, the Trustee or the Master Collateral Agent, as the case
may be, to the effect specified herein.
26
Each of the foregoing representations and warranties will be deemed to
be remade as of the Closing Date with respect to each Series of Notes included
in Group III.
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS. Each Lessee and, as
applicable, each Servicer, the Master Servicer and DTAG in its capacity as
Guarantor each covenants and agrees that, until the expiration or termination of
this Lease, and thereafter until the obligations of such Lessee, such Servicer,
the Master Servicer or the Guarantor, as applicable, under this Lease and the
Related Documents are satisfied in full, unless at any time the Lessor and the
Trustee shall otherwise expressly consent in writing, it will:
24.1 Corporate Existence; Foreign Qualification. Do and cause to be
done at all times all things necessary to (i) maintain and preserve its
corporate existence (except as permitted under Section 25.1); (ii) be duly
qualified to do business and in good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
and the failure to so qualify would have a Material Adverse Effect on it; and
(iii) comply with all Contractual Obligations and Requirements of Law binding
upon it, except to the extent that its failure to comply therewith would not, in
the aggregate, have a Material Adverse Effect on it.
24.2 Books, Records and Inspections. (i) Maintain books and records
that are complete and accurate in all material respects with respect to the
Vehicles leased by it under this Lease; and (ii) at any time and from time to
time during regular business hours, and with reasonable prior notice from the
Lessor, the Master Collateral Agent or the Trustee, permit the Lessor, the
Master Collateral Agent or the Trustee (or such other Person who may be
designated from time to time by the Lessor, the Master Collateral Agent or the
Trustee), or its agents or representatives to examine and make copies of all
books, records and documents in the possession or under the control of such
Person relating to the Vehicles leased under this Lease, including without
limitation, in connection with the Master Collateral Agent's or the Trustee's
satisfaction of any requests of a Manufacturer performing an audit under its
Vehicle Disposition Program.
24.3 Vehicle Disposition Programs. With respect to each Program
Vehicle leased by a Lessee, comply, or cause the related Franchisee to comply,
as appropriate, with all of its obligations under the applicable Vehicle
Disposition Program relating to such Vehicle.
24.4 Reporting Requirements. Furnish, or cause to be furnished to the
Lessor (or to such other Persons as are specified below):
(a) Daily Reports. Daily reports of the Master Servicer as
follows: On each Business Day commencing on the Lease Commencement
Date, the Master Servicer shall prepare and maintain at the office of
the Master Servicer, a record (each, a "Daily Report") setting forth
the aggregate amount of (i) Guaranteed Payments, Repurchase Payments,
Disposition Proceeds and Incentive Payments received from Manufacturers
under Vehicle Disposition Programs or incentive programs, or from other
Persons in connection with the sale or disposition of Vehicles leased
under this Lease, (ii) insurance proceeds in respect of Vehicles leased
under this Lease, (iii) payments in respect of Lessee Agreements, and
(iv) any other Collections in respect of the Master Collateral
allocable to the Trustee as Beneficiary (on behalf of the Group III
Noteholders) and in each case deposited in the Master Collateral
Account and reported to the Master Servicer by the Master Collateral
Agent, in accordance with Section 2.5(b) of the Master Collateral
Agreement, not more than the second Business Day preceding such Daily
Report, and setting forth (x) the aggregate dollar amount of the
Collections identified in the foregoing clauses (i) through (iv), (y)
during the continuance of a Lease Event of Default or a Liquidation
Event of Default, and as needed under Section 2.5(c) or (d) of the
Master Collateral Agency Agreement or, in the sole judgment of the
Master Collateral Agent, as otherwise needed, the portion of such
Collections representing proceeds of the Master Collateral pledged by
the Lessor and the portion pledged by each Lessee, and (z) the
aggregate dollar amount of Sublease payments, insurance payments,
warranty payments (if any), and other payments which, so long as no
Lease Event of Default or Liquidation Event of Default has occurred and
is continuing, may be withdrawn from the Master Collateral Account and
distributed to the applicable Lessee, as set forth in Section 2.5(b) of
the Master Collateral Agency Agreement. Before 3:00 p.m. (New York City
time) on each such Business Day, the Master Servicer shall deliver a
copy of the Daily Report to the Master Collateral Agent and the
Trustee;
27
(b) Monthly Certificate. Monthly certificates of the Master
Servicer as follows: On each Reporting Date, the Master Servicer shall
forward to the Lessee, the Lessor, the Trustee, the Paying Agent, the
Rating Agencies and any applicable Enhancement Provider, an Officers'
Certificate of the Master Servicer (each, a "Monthly Certificate")
setting forth, inter alia, the following information (which, in the
cases of clauses (iii), (iv) and (v) below, will be expressed as a
dollar amount per $1,000 of the original principal amount of such Notes
and as a percentage of the outstanding principal balance of the Notes
as of such date): (i) the aggregate amount of payments received from
the Manufacturers under Vehicle Disposition Programs and deposited in
the Master Collateral Account and the aggregate amount of other Group
III Collections processed for the Related Month with respect to such
Reporting Date; (ii) the Invested Percentage on the last day of the
second preceding Related Month of each Series of Notes included in the
Group III Series of Notes (or, until the end of the second Related
Month for such Series of Notes, as of the Closing Date for such
Series); (iii) for each Series included in the Group III Series of
Notes, the total amount to be distributed to Noteholders on the next
succeeding Payment Date; (iv) for each Series included in the Group III
Series of Notes, the amount of such distribution allocable to principal
on the Notes of such Series; (v) for each Series included in the Group
III Series of Notes, the amount of such distribution allocable to
interest on the Notes; (vi) for each Series included in the Group III
Series of Notes, the amount of Enhancement used or drawn (or to be used
or drawn) in connection with the distribution to Noteholders of such
Series on the next succeeding Payment Date, together with the aggregate
amount of remaining Enhancement not theretofore used or drawn; (vii)
for each Series included in the Group III Series of Notes, the Series
Monthly Servicing Fee for the next succeeding Payment Date; (viii) for
each Series included in the Group III Series of Notes, the existing
Carryover Controlled Amortization Amount, if any; (ix) for each Series
included in the Group III Series of Notes, the applicable Pool Factors
with respect to such Related Month; (x) the Aggregate Asset Amount of
all Group III Series of Notes and the amount of the Asset Amount
Deficiency of all Group III Series of Notes, if any, at the close of
business on the last day of the Related Month; (xi) if Enhancement is
provided for any Series of Notes included in the Group III Series of
Notes by means of overcollateralization, the amount of recoveries and
losses for the Related Month and the amount of any excess funds
available for such overcollateralization, (xii) whether, to the
knowledge of the Master Servicer, any Lien exists on any of the
Collateral for any Series of Notes included in the Group III Series of
Notes (other than Permitted Liens) and (xiii) the percentage of
Vehicles leased under this Lease constituting Program Vehicles, the
percentage of Vehicles leased under this Lease constituting Non-Program
Vehicles, and the percentage of Vehicles leased under this Lease
constituting Program Vehicles of each Manufacturer and Non-Program
Vehicles of each Manufacturer. The Trustee shall be under no duty to
recalculate, verify or recompute the information supplied to it under
this Section 24.4(b);
28
(c) Audit Report. As soon as available and in any event within
one hundred ten (110) days after the end of each fiscal year of the
Guarantor, a copy of the consolidated balance sheet of the Guarantor
and its Subsidiaries as at the end of such fiscal year, together with
the related statements of earnings, stockholders' equity and cash flows
for such fiscal year, prepared in reasonable detail and in accordance
with GAAP, and certified by Deloitte & Touche LLP (or such other
independent certified public accountants of recognized national
standing as shall be selected by the Guarantor) as presenting fairly in
all material respects the financial condition and results of operations
of the Guarantor and its Subsidiaries, with such exceptions as may be
noted in such accountants' report;
(d) Quarterly Statements. As soon as available, but in any
event within forty-five (45) days after the end of each fiscal quarter
(except the fourth fiscal quarter) of the Guarantor, copies of the
unaudited consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such fiscal quarter and the related
unaudited statements of earnings, stockholders' equity and cash flows
for the portion of the fiscal year through such fiscal quarter (and as
to the statements of earnings for such fiscal quarter) in each case
setting forth in comparative form the figures for the corresponding
periods of the previous fiscal year, prepared in reasonable detail and
in accordance with GAAP applied consistently throughout the periods
reflected therein and certified by the chief financial or accounting
officer of the Guarantor as presenting fairly in all material respects
the financial condition and results of operations of the Guarantor and
its Subsidiaries (subject to normal year-end adjustments);
(e) Lease Events of Defaults. Promptly after a Lessee or the
Guarantor has actual knowledge of the occurrence of any Lease Event of
Default, Potential Lease Event of Default, Manufacturer Event of
Default, Potential Manufacturer Event of Default, a written statement
of an Authorized Officer of such Person describing such event and the
action that such Lessee or the Guarantor proposes to take with respect
thereto;
29
(f) Monthly Vehicle Statements. On or before the third
Reporting Date following the date hereof, and on each Reporting Date
thereafter, a monthly vehicle statement (each, a "Monthly Vehicle
Statement") in a form acceptable to the Lessor, which shall specify (i)
the last eight digits of the VIN for the Vehicles leased hereunder
during the Related Month by each Lessee, (ii) whether each such Vehicle
is leased under Annex A or Annex B hereto; (iii) the Capitalized Cost
for such Vehicles, (iv) the aggregate Net Book Value of such Vehicles
as of the end of the Related Month, (v) the VINs for those Vehicles
leased hereunder during the Related Month that have been delivered to
Manufacturers or designated auction sites pursuant to the applicable
Vehicle Disposition Program, or that have been otherwise sold, during
the Related Month, (vi) those Vehicles leased hereunder during the
Related Month that have become a Casualty during the Related Month and
their respective Net Book Values (as of the earlier of the last day of
such Related Month and the date such Vehicle is disposed of or becomes
a Casualty, as applicable), (vii) the total amount of Monthly Base
Rents, Monthly Variable Rents, Monthly Finance Rents, Monthly
Supplemental Payments, Availability Payment, Termination Payments and
Late Return Payments due for the Related Month on such Due Date, (viii)
all prepayments of Rent received during the Related Month from
Guaranteed Payments, Repurchase Payments, Disposition Proceeds and
Incentive Payments received by the Lessor during the Related Month from
the Manufacturers, auctions and other Persons, as the case may be, (ix)
the aggregate Depreciation Charges for all Vehicles leased hereunder
during the Related Month continuing in the possession of each Lessee,
(x) information with respect to each Lessee necessary for the Master
Servicer to compute the Aggregate Asset Amount of the Group III Series
of Notes as of the end of the Related Month, (xi) information with
respect to each Lessee necessary for the Master Servicer to compute the
Availability Payment for each Lessee with respect to the Related Month,
and (xii) any other charges owing from, and credits due to, each Lessee
under this Lease;
(g) Annual Certificate. Each Lessee will deliver to RCFC, the
Trustee, any applicable Enhancement Provider under the Indenture, and
the Rating Agencies rating any outstanding Series of Notes, on or
before April 15 of each calendar year, beginning with April 15, 2002,
an Officers' Certificate substantially in the form of Attachment E
(each, an "Annual Certificate") (a) stating that a review of the
activities of the Lessee during the preceding calendar year (or during
the initial period from the initial Closing Date until April 15, 2002)
and of its performance under this Lease and the other Related Documents
to which each Lessee is a party was made under the supervision of the
officers signing such certificate, (b) stating that to the best of such
officers' knowledge, based on such review, either there has occurred no
event which, with the giving of notice or passage of time or both,
would constitute a Lease Event of Default or Amortization Event and
that such Lessee has fully performed all its obligations under this
Lease and such other Related Documents throughout such year, or, if
there has occurred such event or a Lease Event of Default or
Amortization Event, specifying each such event known to such officers
and the nature and status thereof, and (c) stating (and containing an
Opinion of Counsel to the effect) that all necessary Uniform Commercial
Code continuation statements and other Uniform Commercial Code filings
have been completed (including, without limitation, any "precautionary
filings" made by each of the Lessees in favor of the Lessor), all
necessary Assignment Agreements have been executed and delivered
pursuant to Section 2.1 of the Master Collateral Agency Agreement, and
all other actions, if any, required to maintain the perfected security
interest of the Trustee or the Master Collateral Agent on behalf of the
Trustee in the Collateral and in the Master Collateral have been taken
and that the Trustee or the Master Collateral Agent continues to have a
perfected security interest in the Collateral and Master Collateral;
30
(h) Annual Reports. Annual reports of independent public
accountants as follows: On or before April 15 of each calendar year,
beginning with April 15, 2002, the Master Servicer shall cause a firm
of nationally recognized independent public accountants (who may also
render other services to the Master Servicer) to furnish a report to
RCFC, the Trustee, the Rating Agencies and any Enhancement Provider to
the effect that (i) they have compared the mathematical calculations of
each amount set forth in the monthly certificates forwarded by the
Master Servicer pursuant to this Lease and the Master Collateral Agency
Agreement during the period from January 1 to and including December 31
of the prior calendar year with the Master Servicer's computer reports
which were the source of such amounts and that on the basis of such
comparison, such accountants are of the opinion that such amounts are
in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such
statement, and (ii) they have examined certain documents and the
records relating to the servicing of the Vehicles leased by such Lessee
under this Lease and the other Related Documents to which the Master
Servicer or such Lessee is a party and that, on the basis of such
examination, nothing has come to the attention of such accountants that
would cause such accountants to believe that such servicing (including
the allocations of Collections under the Indenture) has not been
completed in compliance with all of the terms and conditions set forth
in the Base Indenture, any Series Supplement, this Lease and the Master
Collateral Agency Agreement, except for (a) such exceptions as such
accountants believe to be immaterial and (b) such other exceptions as
shall be set forth in such report, the Master Servicer shall serve as
agent for the users of the report in determining the sufficiency of
such procedure;
(i) Non-Program Vehicle Report. Semi-annual (or such other
time period as the Rating Agencies shall require) reports of
independent public accountants as follows: On or before the second
Determination Date immediately following each March 31 and September 30
of each year, beginning with September 30, 2001, the Master Servicer
shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Master Servicer
and who is acceptable to the Rating Agencies) to furnish a report (the
"Non-Program Vehicle Report") to the Lessor, the Trustee, the Rating
Agencies and the Master Collateral Agent to the effect that they have
performed certain agreed upon procedures with respect to the
calculation of Disposition Proceeds obtained from the sale or other
disposition of all Non-Program Vehicles (other than Casualties) sold or
otherwise disposed of during each Related Month in such period and
compared such calculations of Disposition Proceeds with the
corresponding amounts set forth in the Daily Reports prepared by the
Master Servicer pursuant to clause (a) above and that on the basis of
such comparison such accountants are of the opinion that such amounts
are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such
report, the Master Servicer shall serve as agent for the users of the
report in determining the sufficiency of such procedure;
31
(j) Notice of Final Judgment. Promptly, provide to Xxxxx'x and
Standard & Poor's notice of any final judgment in excess of $100,000
rendered against the Lessor; and
(k) Other. From time to time, such other information,
documents, or reports regarding the Vehicles or the financial position,
the results of operations or business of the Lessees as the Lessor, the
Master Collateral Agent or the Trustee may from time to time reasonably
request in order to protect the interests of the Lessor, the Master
Collateral Agent or the Trustee under or as contemplated by this Lease
or any other Related Document.
24.5 Taxes and Liabilities. Pay when due all taxes, assessments and
other material (determined on a consolidated basis) liabilities (including,
without limitation, taxes, titling fees and registration fees payable with
respect to Vehicles), except as contested in good faith and by appropriate
proceedings (but only if and so long as forfeiture of any material part of the
Vehicles leased under this Lease will not result from the failure to pay any
such taxes, assessments or other material liabilities during the period of any
such contest) and with respect to which (a) adequate reserves have been
established, and are being maintained, in accordance with GAAP, and (b) the
failure to make such payments and the maintaining of such reserves would not
have a Material Adverse Effect on such Person or a Material Adverse Effect on
the Group III Noteholders.
24.6 Compliance with Laws. Comply with all Requirements of Law related
to its businesses if the failure so to comply would have a Material Adverse
Effect on such Person.
24.7 Maintenance of Separate Existence. Maintain certain policies and
procedures relating to its existence as a separate corporation as follows: Each
Lessee acknowledges its receipt of a copy of that certain opinion letter issued
by Xxxxxx & Xxxxxxx, dated as of the Closing Date for the Series 2001-1 Notes as
the initial Series of Notes included in the Group III Series of Notes and
addressing the issue of substantive consolidation as it may relate to the
Lessees and the Lessor. Each Lessee hereby agrees to maintain in place all
policies and procedures, and take and continue to take all actions, described in
the factual assumptions set forth in such opinion letter and relating to such
Lessee; provided, however, that such Lessee may cease to maintain any policy or
procedure if and to the extent that such Lessee delivers to the Lessor and the
Trustee an Opinion of Counsel providing that such policy or procedure is no
longer necessary, due to a change in law or otherwise, for the rendering of such
earlier opinion relating to the issue of substantive consolidation.
24.8 Master Collateral Agent as Lienholder. Maintain certain computer
records as follows: Concurrently with each leasing of a Vehicle under this
Lease, the Master Servicer and the related Servicer each shall indicate on its
computer records that the Master Collateral Agent as assignee of the Lessor or
the Lessees, as the case may be, is the holder of a Lien on such Vehicle for the
benefit of the Trustee pursuant to the terms of the Master Collateral Agency
Agreement.
24.9 Maintenance of Property. Keep, or cause to be kept, all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted; provided, that nothing in this Section 24.9
shall require it to maintain, or to make any renewals, replacements, additions,
betterment or improvements of or to, any tangible property if such property, in
its reasonable opinion, is obsolete or surplus or unfit for use or cannot be
used advantageously in the conduct of its business.
32
24.10 Access to Certain Documentation and Information Regarding the
Collateral. Provide to the Trustee and the Master Collateral Agent reasonable
access to the documentation regarding the Collateral and the Master Collateral,
such access being afforded without charge but only (i) upon reasonable request,
(ii) during normal business hours, (iii) subject to the normal security and
confidentiality procedures of the applicable Lessee, the applicable Servicer or
the Master Servicer, as the case may be, and (iv) at offices in the continental
United States designated by such Lessee, such Servicer or the Master Servicer,
as the case may be, which, if they are not the offices where such documentation
normally is kept, shall be accessible without unreasonable effort or expense.
In addition, commencing on the date ten (10) days after the date that a
Lessee or the Master Servicer receives from the Trustee or any Note Owner of any
Note included in the Group III Series of Notes a written request therefor, which
request shall (x) contain a certification of such Note Owner that such person is
a Note Owner and (y) provide an address for delivery, then and thereafter,
unless and until such Lessee or the Master Servicer receives from such Note
Owner a request to discontinue same, the Lessee or the Master Servicer, as
applicable, shall deliver the information specified below directly to such Note
Owner (and, if requested, to one other person as may be specified in such Note
Owner's written request) substantially concurrently with the delivery by such
Lessee or the Master Servicer, as applicable, of such information to any of the
Trustee, any Group III Noteholder or RCFC, provided, however, if such Lessee or
the Master Servicer, as applicable, is not otherwise obligated hereunder to
deliver such information to the Trustee, any Group III Noteholder or RCFC on a
periodic basis, then, unless otherwise specified below, such Lessee or the
Master Servicer, as applicable, shall deliver the following information to such
Note Owner on a monthly basis on the same date as the date on which the Monthly
Certificate delivered pursuant to Section 24.4(b) is delivered:
(i) the Monthly Certificate delivered pursuant to Section
24.4(b);
(ii) the average age of the Lessor's fleet (with respect to
the Vehicles in the Lessor's Fleet that are Group III Vehicles as of
such date);
(iii) copies of any new Vehicle Disposition Programs entered
into by RCFC during the Related Month;
(iv) a statement as to whether a Manufacturer Event of Default
or Lease Event of Default occurred during the Related Month;
(v) any financial reports required to be delivered under this
Lease;
(vi) the Annual Certificate delivered hereunder;
(vii) the Annual Report delivered hereunder;
33
(viii) the Non-Program Vehicle Report; and
(ix) within ten (10) days after written request, such other
information as is reasonably requested by such Note Owner in order to
satisfy any regulatory requirements of such Note Owner.
24.11 Maintenance of Credit Enhancement. The Guarantor agrees to
maintain with respect to each Series of Notes included in the Group III Series
of Notes a letter of credit (or other credit enhancement acceptable to the
Rating Agencies) supporting the obligations of the Lessees under this Lease in a
stated amount that is at least equal to the Minimum Letter of Credit Amount, if
any, for such Series of Notes.
24.12 Certain Additional Actions. The Master Servicer and each Servicer
shall from time to time, as and when specified in the applicable Supplement for
any Series of Notes included in the Group III Series of Notes, provide such
notices to the Trustee and to such other Persons specified in such Supplement,
and perform such other actions, as are in each case specified therein, including
without limitation any notices relating to any letters of credit or other
Enhancement provided for under such Supplement, and the establishment of any
cash collateral accounts relating thereto. Without limiting the foregoing, the
Master Servicer hereby agrees, in connection with the Series 2001-1 Supplement,
to
(a) provide timely notice to the Trustee as described in
Sections 4.16(a) and 4.16(b) of the Series 2001-1 Supplement upon
satisfaction of the conditions for such notice set forth therein;
(b) establish a new Series 2001-1 Cash Collateral Account
which complies with the terms of Section 4.17(a) of the Series 2001-1
Supplement if the existing Series 2001-1 Cash Collateral Account is not
maintained in accordance with such terms, and instruct the Trustee to
transfer into the new Series 2001-1 Cash Collateral Account all cash
and investments from the non-qualifying Series 2001-1 Cash Collateral
Account, in each case as specified in Section 4.17(a) of the Series
2001-1 Supplement;
(c) direct (or designate in writing, with notice thereof to
the Trustee, a Person to direct) the investment in Permitted
Investments of funds held in the Series 2001-1 Cash Collateral Account
as specified in Section 4.17(c) of the Series 2001-1 Supplement; and
(d) give such other notices and instructions to the Trustee as
are specified in the Series 2001-1 Supplement.
24.13 Minimum Depreciation Rate. Each Servicer and the Master Servicer
agree that the scheduled daily depreciation charge with respect to Non-Program
Vehicles leased under this Lease shall be established such that the weighted
average Depreciation Charges accruing with respect to each Non-Program Vehicle
during each Related Month shall be at least equal to 1.0%.
SECTION 25. CERTAIN NEGATIVE COVENANTS. Until the expiration or
termination of this Lease and thereafter until the obligations of the Lessees
are paid in full, each Lessee agrees that, unless at any time the Lessor, the
Master Collateral Agent and the Trustee shall otherwise expressly consent in
writing, it will not:
34
25.1 Mergers, Consolidations. Be a party to any merger or
consolidation, other than a merger or consolidation of such Lessee into or with
another entity if:
(a) the Person formed by such consolidation or into or with
which such Lessee is merged shall be a Person organized and existing
under the laws of the United States of America or any State or the
District of Columbia, and, if such Lessee is not the surviving entity,
shall expressly assume, by an agreement supplemental hereto executed
and delivered to the Trustee, the performance of every covenant and
obligation of such Lessee hereunder and under all other Related
Documents;
(b) such Lessee has delivered to the Trustee an officer's
certificate and an opinion of counsel each stating that such
consolidation or merger and such supplemental agreement comply with
this Section 25.1 and that all conditions precedent herein provided for
relating to such transaction have been complied with; and
(c) the Rating Agency Condition shall be met and, if required
by the Series Supplement for a Group III Series, the consent of the
Enhancement Provider for such Series shall have been obtained with
respect to such assignment and succession.
25.2 Other Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
25.3 Liens. Create or permit to exist any Lien with respect to any
Vehicle leased hereunder now or hereafter existing or acquired, except Liens in
favor of the Lessor, the Master Collateral Agent or the Trustee, the lien on the
Financed Vehicles in favor of the Series 2001-1 Letter of Credit Provider (or
any letter of credit provider supporting the obligations of the Lessees under
this Lease for the benefit of any other Group III Noteholders), and the Liens
set forth in Schedule 4, if any, and the following Liens to the extent such
liens in the aggregate would not have a Material Adverse Effect on the Lessor,
the Master Collateral Agent or the Trustee or the Noteholders under this Lease
or the Indenture (all the foregoing Liens collectively, the "Permitted Liens"):
(i) Liens for current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings, and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of
business being contested in good faith and by appropriate proceedings, and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) Liens incurred in the ordinary course
of business in connection with worker's compensation, unemployment insurance or
other forms of governmental insurance or benefits, and (iv) mechanics'
materialmen's, landlords', warehousemen's and carrier's Liens, and other Liens
imposed by law, securing obligations arising in the ordinary course of business
that are being contested in good faith and by appropriate proceedings and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP.
35
25.4 Use of Vehicles. Knowingly use or allow the Program Vehicles to
be used in any manner that would (i) make any such Program Vehicles ineligible
for repurchase by their respective Manufacturers or for sale in accordance with
applicable Auction Procedures, except with respect to the permitted
redesignation of Program Vehicles as Non-Program Vehicles, pursuant to Section
14, or (ii) subject the Vehicles to confiscation.
25.5 Texas and Hawaii Vehicles. Submit requests to or otherwise cause
to be leased hereunder (i) a materially disproportionate percentage of Vehicles
located in Texas and Hawaii than the aggregate percentage of Vehicles located in
those States in the entire fleet used by Dollar and Thrifty in their daily
rental business, or (ii) Financed Vehicles in States other than Texas and
Hawaii.
SECTION 26. SERVICING COMPENSATION.
26.1 Fees. As compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in Section 26.2, each Servicer and
the Master Servicer shall be entitled to receive from the Lessor a monthly
servicing fee (the "Monthly Servicing Fee"), payable in arrears on each Payment
Date prior to the termination of this Lease, the Indenture and the Master
Collateral Agency Agreement in an amount equal to the sum of the monthly
servicing fees for all Series of Notes included in the Group III Series of
Notes. Except as otherwise specified in the related Series Supplement, the
Monthly Servicing Fee for each Series of Notes included in the Group III Series
of Notes (each, a "Series Monthly Servicing Fee") on each Payment Date shall be
equal to (i) the portion of the Group III Supplemental Servicing Fee allocated
to such Group III Series of Notes pursuant to the related Supplement, plus (ii)
one-twelfth of the product of (A) the Servicing Fee Percentage for such Series
and (B) the Invested Amount of such Series as of the preceding Payment Date
(after giving effect to any payments of principal on such date). The Series
Monthly Servicing Fee for each Series of Notes included in the Group III Series
of Notes shall be paid to the Master Servicer (for allocation among the Master
Servicer and the Servicers) pursuant to the procedures set forth in the
applicable Series Supplement. The supplemental servicing fee (the "Group III
Supplemental Servicing Fee") for any period shall be equal to all Carrying
Charges comprising payments due from the Servicers under Section 26.2 hereof.
26.2 Expenses. The expenses of each Servicer include, and each
Servicer agrees to pay, its Pro Rata Share of the amounts due to the Trustee
pursuant to Section 9.5 of the Base Indenture and allocable to the Group III
Series of Notes, plus its Pro Rata Share of the reasonable fees and
disbursements of independent accountants in connection with reports furnished
pursuant to Sections 24.4(h) and (i), plus its allocable share of all other
fees, expenses and indemnities incurred by such Servicer or the Lessor in
connection with the Servicer's activities hereunder or under the Related
Documents. The Servicers, however, shall not be liable for any liabilities,
costs or expenses of the Lessor, the Trustee or the Group III Noteholders
arising under any tax law, including without limitation any Federal, state or
local income or franchise taxes or any other tax imposed on or measured by
income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith), except to the extent incurred as a result of a
Servicer's violation of the provisions of this Lease or of the Related
Documents; provided, however, the foregoing provisions of this sentence shall
not affect the indemnification obligations of the Lessees under Section 15 of
this Lease. In the event that a Servicer fails to pay any amount due to the
Trustee pursuant to Section 9.5 of the Base Indenture, the Trustee will be
entitled to receive such amounts due from the Monthly Servicing Fee prior to
payment thereof to such Servicer.
36
SECTION 27. GUARANTY.
27.1 Guaranty. In order to induce the Lessor to execute and deliver
this Lease and to lease Vehicles hereunder to the Lessees, and in consideration
thereof, the Guarantor hereby (i) unconditionally and irrevocably guarantees to
the Lessor the obligations of each of the Lessees to make any payments required
to be made by them under this Lease, (ii) agrees to cause each Lessee to duly
and punctually perform and observe all of the terms, conditions, covenants,
agreements and indemnities applicable to such Lessee (whether in its capacity as
a Lessee or as a Servicer) under this Lease, and (iii) agrees that, if for any
reason whatsoever, any Lessee (whether in its capacity as a Lessee or as a
Servicer) fails to so perform and observe such terms, conditions, covenants,
agreements and indemnities, the Guarantor will duly and punctually perform and
observe the same (the obligations referred to in clauses (i) through (iii) above
are collectively referred to as the "Guaranteed Obligations"). The liabilities
and obligations of the Guarantor under the guaranty contained in this Section 27
(this "Guaranty") will be absolute and unconditional under all circumstances.
This Guaranty shall be a guaranty of payment and not of collection, and the
Guarantor hereby agrees that it shall not be required that the Lessor or the
Trustee assert or enforce any rights against any of the Lessees, the Servicers
or any other person before or as a condition to the obligations of the Guarantor
pursuant to this Guaranty.
27.2 Scope of Guarantor's Liability. The Guarantor's obligations
hereunder are independent of the obligations of the Lessees (whether as Lessee
or as Servicer), any other guarantor or any other Person, and the Lessor may
enforce any of its rights hereunder independently of any other right or remedy
that the Lessor may at any time hold with respect to this Lease or any security
or other guaranty therefor. Without limiting the generality of the foregoing,
the Lessor may bring a separate action against the Guarantor without first
proceeding against any of the Lessees, any other guarantor or any other Person,
or any security held by the Lessor, and regardless of whether the Lessees or any
other guarantor or any other Person is joined in any such action. The
Guarantor's liability hereunder shall at all times remain effective with respect
to the full amount due from the Lessees hereunder. The Lessor's rights hereunder
shall not be exhausted by any action taken by the Lessor until all Guaranteed
Obligations have been fully paid and performed.
27.3 Lessor's Right to Amend this Lease. The Guarantor authorizes the
Lessor, at any time and from time to time without notice and without affecting
the liability of the Guarantor hereunder, to: (a) alter the terms of all or any
part of the Guaranteed Obligations and any security and guaranties therefor
including without limitation modification of times for payment and rates of
interest; (b) accept new or additional instruments, documents, agreements,
security or guaranties in connection with all or any part of the Guaranteed
Obligations; (c) accept partial payments on the Guaranteed Obligations; (d)
waive, release, reconvey, terminate, abandon, subordinate, exchange, substitute,
transfer, compound, compromise, liquidate and enforce all or any part of the
Guaranteed Obligations and any security or guaranties therefor, and apply any
such security and direct the order or manner of sale thereof (and bid and
purchase at any such sale), as the Lessor in its discretion may determine; (e)
release any Lessee, any guarantor or any other Person from any personal
liability with respect to all or any part of the Guaranteed Obligations; and (f)
assign its rights under this Guaranty in whole or in part.
37
27.4 Waiver of Certain Rights by Guarantor. The Guarantor hereby
waives each of the following to the fullest extent allowed by law:
(a) any defense based upon:
(i) the unenforceability or invalidity of any security or
other guaranty for the Guaranteed Obligations or the lack of perfection
or failure of priority of any security for the Guaranteed Obligations;
or
(ii) any act or omission of the Lessor or any other Person
that directly or indirectly results in the discharge or release of any
of the Lessees or any other Person or any of the Guaranteed Obligations
or any security therefor; provided that the Guarantor's liability in
respect of this Guaranty shall be released to the extent the Lessor
expressly releases such Lessee or other Person, in a writing conforming
to the requirements of Section 22, from any Guaranteed Obligations; or
(iii ) any disability or any other defense of any Lessee or any
other Person with respect to the Guaranteed Obligations, whether
consensual or arising by operation of law or any bankruptcy, insolvency
or debtor-relief proceeding, or from any other cause;
(b) any right (whether now or hereafter existing) to require the
Lessor, as a condition to the enforcement of this Guaranty, to:
(i) accelerate the Guaranteed Obligations;
(ii) give notice to the Guarantor of the terms, time and place
of any public or private sale of any security for the Guaranteed
Obligations; or
(iii) proceed against any Lessee, any other guarantor or any
other Person, or proceed against or exhaust any security for the
Guaranteed Obligations;
(c) presentment, demand, protest and notice of any kind, including
without limitation notices of default and notice of acceptance of this Guaranty;
(d) all suretyship defenses and rights of every nature otherwise
available under New York law and the laws of any other jurisdiction;
(e) any right that the Guarantor has or may have to set-off with
respect to any right to payment from any Lessee; and
(f) all other rights and defenses the assertion or exercise of which
would in any way diminish the liability of the Guarantor hereunder.
38
27.5 Lessees' Obligations to Guarantor and Guarantor's Obligations to
Lessees Subordinated. Until all of the Guaranteed Obligations have been paid in
full, the Guarantor agrees that all existing and future unsecured debts,
obligations and liabilities of the Lessees to the Guarantor or the Guarantor to
any of the Lessees (hereinafter collectively referred to as "Subordinated Debt")
shall be and hereby are expressly subordinated to the prior payment in full of
the Guaranteed Obligations, on the terms set forth in clauses (a) through (e)
below, and the payment thereof is expressly deferred in right of payment to the
prior payment in full of the Guaranteed Obligations. For purposes of this
Section 27.5, to the extent the Guaranteed Obligations consist of the obligation
to pay money, the Guaranteed Obligations shall not be deemed paid in full unless
and until paid in full in cash.
(a) Upon any distribution of assets of the Guarantor or any Lessee
upon any dissolution, winding up, liquidation or reorganization of the Guarantor
or such Lessee, whether in bankruptcy, insolvency, reorganization or
receivership proceedings, or upon an assignment for the benefit of creditors or
any other marshaling of the assets and liabilities of the Guarantor or such
Lessee, or otherwise:
(i) the holders of the Guaranteed Obligations shall be
entitled to receive payment in full of the Guaranteed Obligations
before the Guarantor or any Lessee, as the case may be, is entitled to
receive any payment on account of the Subordinated Debt;
(ii) any payment by, or distribution of assets of, the
Guarantor or such Lessee of any kind or character, whether in cash,
property or securities, to which such Lessee or the Guarantor would be
entitled except for this subordination shall be paid or delivered by
the Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee, or otherwise, directly
to the Trustee, for the benefit of the holders of the Guaranteed
Obligations to be held as additional security for the Guaranteed
Obligations in an interest bearing account until the Guaranteed
Obligations have been paid in full; and
(iii) if, notwithstanding the foregoing, any payment by, or distribution of
assets of, the Guarantor or such Lessee of any kind or character, whether in
cash, property or securities, in respect of any Subordinated Debt shall be
received by such Lessee or the Guarantor before the Guaranteed Obligations are
paid in full, such payment or distribution shall be held in trust in an interest
bearing account of the Guarantor or such Lessee, as appropriate, and immediately
paid over in kind to the holders of the Guaranteed Obligations until the
Guaranteed Obligations have been paid in full.
(b) The Guarantor authorizes and directs each Lessee and each Lessee
authorizes and directs the Guarantor to take such action as may be necessary or
appropriate to effectuate and maintain the subordination provided herein.
(c) No right of any holder of the Guaranteed Obligations to enforce
the subordination herein shall at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor, any Lessee,
the Lessor or any other Person or by any noncompliance by the Guarantor, any
Lessee, the Lessor or any other Person with the terms, provisions and covenants
hereof or of the Related Documents regardless of any knowledge thereof that any
such holder of the Guaranteed Obligations may have or be otherwise charged with.
39
(d) Except as provided in Section 27.9, nothing express or implied
herein shall give any Person other than the Lessees, the Lessor, the Trustee and
the Guarantor any benefit or any legal or equitable right, remedy or claim
hereunder.
(e) If the Guarantor shall institute or participate in any suit,
action or proceeding against any Lessee or any Lessee shall institute or
participate in any suit, action or proceeding against the Guarantor, in
violation of the terms hereof, such Lessee or the Guarantor, as the case may be,
may interpose as a defense or dilatory plea this subordination, and the holders
of the Guaranteed Obligations are irrevocably authorized to intervene and to
interpose such defense or plea in their name or in the name of such Lessee or
the Guarantor, as the case may be.
27.6 Guarantor to Pay Lessor's Expenses. The Guarantor agrees to pay
to the Lessor (or the Trustee), on demand, all costs and expenses, including
reasonable attorneys' and other professional and paraprofessional fees, incurred
by the Lessor (or the Trustee) in exercising any right, power or remedy
conferred by this Guaranty, or in the enforcement of this Guaranty, whether or
not any action is filed in connection therewith. Until paid to the Lessor, such
amounts shall bear interest, commencing with the Lessor's demand therefor, for
each Interest Period during the period from the date of such demand until paid,
at the VFR for such Interest Period plus 1% (calculated on the basis of a
360-day year).
27.7 Reinstatement. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment of any of the amounts
payable by any Lessee under this Lease is rescinded or must otherwise be
restored or returned by the Lessor, upon an event of bankruptcy, dissolution,
liquidation or reorganization of any Lessee or the Guarantor or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Lessee, the Guarantor, any other Guarantor
or any other Person, or any substantial part of their respective property, or
otherwise, all as though such payment had not been made.
27.8 Pari Passu Indebtedness. The Guarantor (i) represents and
warrants that, as of the date hereof, the obligations of the Guarantor under
this Guaranty will rank pari passu with any existing unsecured indebtedness of
the Guarantor and (ii) covenants and agrees that from and after the date hereof
the obligations of the Guarantor under this Guaranty will rank pari passu with
any unsecured indebtedness of the Guarantor incurred after the date hereof.
27.9 Tax Indemnity. The Guarantor shall indemnify and hold harmless,
the Lessor, the Trustee and the Noteholders from and against any and all income
taxes, together with any interest and any penalties, additions to tax or
additional amounts imposed by the Internal Revenue Service and/or any state or
local income tax authority, and other losses, costs, liabilities, claims and
expenses, including reasonable attorneys' fees suffered or incurred by the
Lessor or the Trustee, arising out of any proposed allowance by the Internal
Revenue Service and/or any state or local income tax authority of any position
taken by the Lessor or its Affiliates on any income tax return that gain is not
recognized from the exchange of one or more Group III Vehicles for property of
like kind under Section 1031 of the Internal Revenue Code of 1986, as amended,
and/or any corresponding provision of state or local income tax law.
40
27.10 Third-Party Beneficiaries. The Guarantor acknowledges that the
Trustee (on behalf of the Group III Noteholders) has accepted the assignment of
the Lessor's rights under this Lease as collateral for such Notes in reliance on
the Guaranty and that the Trustee (for the benefit of Group III Noteholders)
shall be a third-party beneficiary hereunder.
SECTION 28. ADDITIONAL LESSEES.
28.1 Additional Lessees. Any direct or indirect Subsidiary of the
Guarantor (each, a "Guarantor Subsidiary") shall have the right to become a
"Lessee" under and pursuant to the terms of this Lease by complying with the
provisions of this Section 28.1. In the event a Guarantor Subsidiary desires to
become a "Lessee" under this Lease, then the Guarantor and such Guarantor
Subsidiary shall execute (if appropriate) and deliver to the Lessor and the
Trustee:
(a) a Joinder in Lease Agreement in the form attached hereto
as Attachment D (each, an "Affiliate Joinder in Lease");
(b) the certificate of incorporation for such Guarantor
Subsidiary, duly certified by the Secretary of State of the
jurisdiction of such Guarantor Subsidiary's incorporation, together
with a copy of the by-laws of such Guarantor Subsidiary, duly certified
by a Secretary or Assistant Secretary of such Guarantor Subsidiary;
(c) copies of resolutions of the Board of Directors of such
Guarantor Subsidiary authorizing or ratifying the execution, delivery
and performance, respectively, of those documents and matters required
of it with respect to this Lease, duly certified by the Secretary or
Assistant Secretary of such Guarantor Subsidiary;
(d) a certificate of the Secretary or Assistant Secretary of
such Guarantor Subsidiary certifying the names of the individual or
individuals authorized to sign the Affiliate Joinder in Lease and the
other Related Documents to be executed by it, together with samples of
the true signatures of each such individual;
(e) a good standing certificate for such Guarantor Subsidiary
in the jurisdiction of its incorporation and the jurisdiction of its
principal place of business;
(f) a written search report from a Person satisfactory to the
Lessor and the Trustee listing all effective financing statements that
name such Guarantor Subsidiary as debtor or assignor, and that are
filed in the jurisdictions in which filings were made pursuant to
clause (g) below, together with copies of such financing statements,
and tax and judgment lien search reports from a Person satisfactory to
the Lessor and the Trustee showing no evidence of liens filed against
such Guarantor Subsidiary that purport to affect any Vehicles leased
hereunder or any Collateral under the Indenture;
41
(g) evidence of the filing of proper financing statements on
Form UCC-1 naming such Guarantor Subsidiary, as debtor, and the Lessor
as secured party covering the collateral described in Section 2(b)
hereof;
(h) an Officers' Certificate and an opinion of counsel each
stating that such joinder by such Guarantor Subsidiary complies with
this Section 28.1 and that all conditions precedent herein provided for
relating to such transaction have been complied with;
(i) a statement from each of the Rating Agencies that such
Guarantor Subsidiary becoming a "Lessee" under this Lease will not
cause a failure to meet the Rating Agency Condition; and
(j) any additional documentation that the Lessor or the
Trustee may reasonably require to evidence the assumption by such
Guarantor Subsidiary of the obligations and liabilities set forth in
this Lease.
Upon satisfaction of the foregoing conditions and receipt by such Guarantor
Subsidiary of the applicable Affiliate Joinder in Lease executed by the Lessor,
such Guarantor Subsidiary shall for all purposes be deemed to be a "Lessee" for
purposes of this Lease (including, without limitation, the Guaranty which is a
part of this Lease) and shall be entitled to the benefits and subject to the
liabilities and obligations of a Lessee hereunder.
SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR. Each Lessee and the
Guarantor hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of all Series of Notes issued by the
Lessor, it will not institute against, or join any other Person in instituting
against, the Lessor any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States. In the event that a Lessee (or any
sublessee thereof) or the Guarantor takes action in violation of this Section
29, the Lessor agrees, for the benefit of the Noteholders, that it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such a petition by such Lessee or the Guarantor against the Lessor or the
commencement of such action and raise the defense that such Lessee or the
Guarantor, as applicable, has agreed in writing not to take such action and
should be estopped and precluded therefrom and such other defenses, if any, as
its counsel advises that it may assert. The provisions of this Section 29 shall
survive the termination of this Lease.
SECTION 30. SUBMISSION TO JURISDICTION. THE LESSOR, THE MASTER
COLLATERAL AGENT AND THE TRUSTEE MAY ENFORCE ANY CLAIM ARISING OUT OF THIS LEASE
IN ANY STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION, INCLUDING,
WITHOUT LIMITATION, ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF NEW YORK
IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY. FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, EACH LESSEE AND THE
GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS. EACH
LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM,
INC., 000 XXXXXX XXXXXX, 00XX XXXXX, XXX XXXX, XXX XXXX 00000, TO RECEIVE FOR
AND ON BEHALF OF SUCH LESSEE AND GUARANTOR SERVICE OF PROCESS IN NEW YORK. EACH
LESSEE AND THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE
PREPAID, TO SUCH LESSEE OR THE GUARANTOR, AS APPLICABLE, AND AGREES THAT SUCH
SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW, (I) SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR
PROCEEDING AND (II) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON
AND PERSONAL DELIVERY TO IT. Nothing herein contained shall affect the right of
the Lessor to serve process in any other manner permitted by law or preclude the
Lessor, the Master Collateral Agent or the Trustee from bringing an action or
proceeding in respect hereof in any other country, state or place having
jurisdiction over such action. EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT LOCATED IN THE STATE OF NEW YORK IN THE
BOROUGH OF MANHATTAN IN NEW YORK CITY AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
42
SECTION 31. GOVERNING LAW. THIS LEASE SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES. Whenever possible each provision of this Lease
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Lease shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease. All obligations of the
Lessees and the Guarantor and all rights of the Lessor, the Master Collateral
Agent or the Trustee expressed herein shall be in addition to and not in
limitation of those provided by applicable law or in any other written
instrument or agreement.
SECTION 32. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS LEASE OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A
PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS LEASE OR ANY RELATED TRANSACTION,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
SECTION 33. NOTICES. All notices, requests and other communications
to any party or signatory hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party or signatory,
addressed to it, at its address or facsimile number set forth on the signature
pages below, or at such other address or facsimile number as such party may
hereafter specify for such purpose by notice (in accordance with this Section
33) to the other parties and signatories hereto. In each case, a copy of all
notices, requests and other communications (other than any such notices,
requests and other communications in the ordinary course of business) that are
sent by any party or signatory hereunder shall be sent to the Trustee. Copies of
notices, requests and other communications delivered to the Trustee pursuant to
the foregoing sentence shall be sent to the following address:
Bankers Trust Company
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Each such notice, request or communication shall be effective when received at
the address specified below. Copies of all facsimile notices must be sent by
first class mail promptly after such transmission by facsimile.
43
SECTION 34. HEADINGS. Section headings used in this Lease are for
convenience of reference only and shall not affect the construction of this
Lease.
SECTION 35. EXECUTION IN COUNTERPARTS. This Lease may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute one and the same agreement.
SECTION 36. EFFECTIVENESS. This Lease shall become effective on the
Lease Commencement Date, subject to (i) the requirement that the representations
and warranties contained in Section 23 shall be true and correct in all respects
(except to the extent any such representation and warranty does not incorporate
a materiality limitation in its terms and the failure of such representation and
warranty to be true and correct in all respects does not have a Material Adverse
Effect on the interest of the Lessor, the Trustee or the Secured Parties) and
(ii) the prior or concurrent delivery of each of the following documents to the
Lessor (in form and substance satisfactory to the Lessor):
(a) Certificate of Incorporation. The certificate of
incorporation of each Lessee (other than the Additional Lessees) and
the Guarantor, duly certified by the Secretary of State of the
jurisdiction of its incorporation, together with a copy of its by-laws,
duly certified by the Secretary or an Assistant Secretary of such
Lessee or the Guarantor, as applicable;
(b) Resolutions. Copies of resolutions of the Board of
Directors of each Lessee (other than the Additional Lessees) and the
Guarantor authorizing or ratifying the execution, delivery and
performance of those documents and matters required of it with respect
to this Lease, duly certified by the Secretary or Assistant Secretary
of such Lessee or the Guarantor, as applicable;
44
(c) Consents, etc. Certified copies of all documents
evidencing any necessary corporate action, consents and governmental
approvals (if any) with respect to this Lease;
(d) Incumbency and Signatures. A certificate of the Secretary
or an Assistant Secretary of each Lessee (other than the Additional
Lessees) and the Guarantor certifying the names of the individual or
individuals authorized to sign this Lease and the other Related
Documents to be executed by it (in such capacity or otherwise),
together with a sample of the true signature of each such individual
(the Lessor, the Master Collateral Agent and the Trustee may
conclusively rely on each such certificate until formally advised by a
like certificate of any changes therein);
(e) Opinions of Counsel. (i) The opinion of Xxxxxx & Xxxxxxx,
addressed to the Lessees (other than the Additional Lessees), the
Lessor, the Trustee, the Master Collateral Agent, the Enhancement
Providers and the Rating Agencies; (ii) the opinion of each
Manufacturer, as required by the Rating Agencies, addressed to the
Lessees, the Lessor, the Trustee, the Master Collateral Agent, the
Enhancement Providers and the Rating Agencies; (iii) the opinion of
counsel to each Enhancement Provider, addressed to the Lessees, the
Lessor, the Trustee, the Master Collateral Agent and the Rating
Agencies; (iv) the opinion of White & Case, counsel to the Trustee,
addressed to the Lessees, the Lessor, the Master Collateral Agent and
each Enhancement Provider; and (v) the opinion of Hall, Estill,
Hardwick, Gable, Golden & Xxxxxx, P.C., Oklahoma counsel to the
Lessees, the Servicers and the Master Servicer addressed to the Lessor,
the Trustee, the Master Collateral Agent, the Enhancement Providers and
the Rating Agencies, in each case, satisfactory in form and substance
to the addressees thereof;
(f) Good Standing Certificates. Certificates of good standing
for each Lessee (other than the Additional Lessees) and the Guarantor
in the jurisdiction of its organization and the jurisdiction of its
principal place of business;
(g) Search Reports. Search reports satisfactory to the Lessor
and the Trustee listing all effective financing statements that name a
Lessee as debtor or assignor and that are filed in the jurisdictions in
which filings were made pursuant to subsection (h) below, together with
copies of such financing statements, and tax and judgment lien search
reports from a Person satisfactory to the Lessor and the Trustee
showing no evidence of such liens filed against such Lessee;
(h) Evidence. Evidence of the filing of proper financing
statements on Form UCC-1, (i) naming each Lessee (other than the
Additional Lessees) as debtor and the Master Collateral Agent as
secured party or other, similar instruments or documents, as may be
necessary or desirable under the UCC of all applicable jurisdictions to
perfect the Master Collateral Agent's interest in the Master Collateral
with respect to which the Trustee is designated as the Beneficiary on
behalf of the Group III Noteholders and (ii) naming each Lessee (other
than the Additional Lessees) as debtor, the Lessor as secured party and
the Master Collateral Agent as assignee, as may be necessary or
desirable under the UCC of all applicable jurisdictions to perfect the
security interest (with respect to the Financing Lease) and the
precautionary security interest (with respect to the Operating Lease)
of the Lessor hereunder and the assignment of the same to the Master
Collateral Agent;
45
(i) Master Collateral Agency Agreement. An executed copy of
the Master Collateral Agency Agreement;
(j) Lease. Original counterpart No. 1 of this Lease shall be
delivered to the Trustee with receipt acknowledged thereby;
(k) Assignment Agreement. An executed copy of the Assignment
Agreement of each Manufacturer of Program Vehicles which will be leased
under this Lease on the Closing Date for the Series 2001-1 Notes;
(l) Certified Copy of Manufacturer Program. A copy of each
Manufacturer Program relating to Vehicles which will be leased
hereunder and an Officer's Certificate, dated the Closing Date for the
Series 2001-1 Notes, and duly executed by an Authorized Officer of the
Lessee, certifying that each such copy is true, correct and complete as
of the Closing Date for the Series 2001-1 Notes;
(m) The Indenture Supplement. Copies of the Series 2001-1
Supplement, dated as of the Series 2001-1 Closing Date, and the Base
Indenture, in each case duly executed by the Lessor and the Trustee,
and all conditions to the effectiveness thereof and the issuance of the
Notes thereunder shall have been satisfied or waived in all respects;
(n) Series 2001-1 Letter of Credit. The Series 2001-1 Letter
of Credit, issued by Credit Suisse First Boston, with an initial stated
amount of $14,875,000; and
(o) Other. Such other documents as the Trustee or the Lessor
may reasonably request.
[Signatures on following pages.]
46
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Lease or caused it
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
LESSOR:
RENTAL CAR FINANCE CORP.
By:
-------------------------------------------
Xxxxxx X. Xxxx
Vice President and Treasurer
Address: 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LESSEES AND SERVICERS:
THRIFTY RENT-A-CAR SYSTEM, INC.
By:
-------------------------------------------
Xxxxxx X. Xxxx
Treasurer
Address: 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
47
DOLLAR RENT A CAR SYSTEMS, INC.
By:
-------------------------------------------
Xxxxxxx X. XxXxxxx
Treasurer
Address: 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
GUARANTOR:
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
By:
-------------------------------------------
Xxxxxx X. Xxxx
Treasurer
Address: 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNTERPART NO. ___ OF TEN (10) SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER
UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE
CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN
MANUALLY EXECUTED COUNTERPART NO. 1
48
The Trustee does hereby acknowledge, by its signature below, receipt of
this Counterpart No. 1.
TRUSTEE:
BANKERS TRUST COMPANY
By:
-------------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Address: 0 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Acknowledged by:
MASTER COLLATERAL AGENT:
BANKERS TRUST COMPANY
By:
----------------------------------
Name:
---------------------------
Title:
--------------------------
Address: 0 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
49
ANNEX A
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of March 6, 2001
among
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those Subsidiaries
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers under such Master Motor
Vehicle Lease and Servicing Agreement
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
1. Scope of Annex. This Annex A shall apply only to the acquisition,
leasing and servicing of the Acquired Vehicles by the Lessor pursuant to the
Base Lease, as supplemented by this Lease Annex (collectively, the "Operating
Lease").
2. General Agreement. With respect to the Acquired Vehicles, each
Lessee and the Lessor each intend that the Base Lease, as supplemented by this
Lease Annex, is an operating lease and that the relationship between the Lessor
and the Lessees pursuant thereto and hereto shall always be only that of lessor
and lessee, and each Lessee hereby declares, acknowledges and agrees that the
Lessor has title to and is the owner of the Acquired Vehicles. The Lessees shall
not acquire by virtue of the Lease any right, equity, title or interest in or to
any Acquired Vehicles, except the right to use the same under the terms of the
Operating Lease hereof. The parties agree that this Operating Lease is a "true
lease" for all legal, accounting, tax and other purposes and agree to treat this
Operating Lease, as it applies to the Acquired Vehicles, as an operating lease
for all purposes, including tax, accounting and otherwise. The parties will file
all federal, state and local tax returns and reports in a manner consistent with
the preceding sentence.
3. Operating Lease Commitment. (a) Upon the execution and delivery of
this Operating Lease, the Lessor shall, subject to the terms and conditions of
the Agreement, purchase or refinance from time to time on or after the Lease
Commencement Date and prior to the Lease Expiration Date, all Acquired Vehicles
identified in Vehicle Orders placed by a Lessee for a purchase price equal to
the Initial Acquisition Cost thereof, and simultaneously therewith, the Lessor
shall under the Operating Lease enter into operating leases with such Lessee
with respect to such Vehicles; provided, that the aggregate Net Book Value of
Acquired Vehicles leased hereunder on any date shall not exceed (a) the Maximum
Lease Commitment, less (b) the Base Amount as of such date with respect to the
Financing Lease.
4. Lease Procedures. In connection with the Lease of any Acquired
Vehicles to be leased on or after the Lease Commencement Date, to evidence the
acquisition of such Acquired Vehicles by the Lessor, the applicable Lessee shall
deliver to the Lessor the following:
(a) a Vehicle Order (including a Vehicle Acquisition Schedule)
with respect to all Acquired Vehicles to be leased by such Lessee on the
Lease Commencement Date;
(b) UCC termination statements terminating, or UCC partial
releases releasing, any security interests and other liens (other than
Permitted Liens) in favor of any Person with respect to each Acquired
Vehicle leased on the Lease Commencement Date and identified in such
Vehicle Order, and any related Vehicle Disposition Programs;
(c) with respect to the initial lease of Acquired Vehicles by
such Lessee, a fully executed Assignment Agreement covering each
Program Vehicle leased under this Annex A on the Lease Commencement
Date or to be leased under this Annex A on any date thereafter, the
related Vehicle Disposition Programs, and any other Master Collateral
relating to such Vehicles.
2
Each Lessee hereby agrees that each such delivery of a Vehicle Order
shall be deemed hereunder to constitute a representation and warranty by the
Lessee, to and in favor of the Lessor and the Trustee, that all the conditions
precedent to the acquisition and leasing of the Vehicles identified in such
Vehicle Order have been satisfied as of the date of such Vehicle Order.
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the
Operating Lease as it relates to each Acquired Vehicle leased hereunder shall be
from the Vehicle Lease Commencement Date to the date that is 24 months from the
date of the original new vehicle dealer invoice for such Acquired Vehicle. On
the occurrence of such date for a Vehicle not previously disposed of, the
applicable Lessee shall, (a) on behalf of the Lessor, promptly dispose of such
Vehicle in accordance with the terms hereof and in accordance with any
instructions of the Lessor for such disposition, (b) in each case, provide that
Disposition Proceeds be paid directly to the Master Collateral Account for the
benefit of the Trustee and (c) pay to the Master Collateral Agent or the
Trustee, in accordance with this Operating Lease, any other amounts unpaid and
owing from such Lessee under the Lease in respect of such Vehicle.
6. Lessee's Rights to Purchase Vehicles. Each Lessee will have the
option, exercisable with respect to any Acquired Vehicle during the Vehicle Term
with respect to such Acquired Vehicle, to purchase any Vehicles leased by it
under the Lease at the Vehicle Purchase Price, in which event such Lessee will
pay the Vehicle Purchase Price to the Master Collateral Agent on or before the
Due Date next succeeding such purchase by the Lessee plus all accrued and unpaid
Monthly Base Rent and Monthly Variable Rent with respect to such Vehicle through
the date of such purchase. In addition, each Lessee will have the option,
exercisable with respect to any Manufacturer Receivable related to an Acquired
Vehicle which was leased by such Lessee under this Lease, to purchase such
Manufacturer Receivable for a price equal to the amount due from the
Manufacturer under such Manufacturer Receivable, in which event the Lessee will
pay such amount to the Master Collateral Agent on or before the Payment Date
next succeeding such purchase by the Lessee. Upon receipt of such funds by the
Master Collateral Agent, the Lessor, at the request of the Lessee, shall cause
title to any such Vehicle or Manufacturer Receivable, as applicable, to be
transferred to the applicable Lessee, and the lien of the Master Collateral
Agent on such Vehicle shall be released thereby.
7. Vehicle Disposition. The Lessor and each Lessee agree that, with
respect to Acquired Vehicles, the applicable Lessee shall use its commercially
reasonable efforts to deliver each Program Vehicle leased by it under the Lease
for sale in accordance with the applicable Auction Procedures or to return such
related Program Vehicle to the related Manufacturer (a) not prior to the end of
the Minimum Term for such Vehicle, and (b) not later than the end of the Maximum
Term for such Vehicle; provided, however, if for any reason, such Lessee fails
to deliver such a Program Vehicle to the applicable Manufacturer for repurchase
by the Manufacturer or in accordance with the applicable Auction Procedures, in
each case in accordance with the applicable Vehicle Disposition Program during
the time period between the expiration of the Minimum Term and the expiration of
the Maximum Term, such Lessee shall be obligated to sell or otherwise dispose of
such Program Vehicle and pay a Late Return Payment with respect thereto, in each
case as provided in Section 13 of the Base Lease. Each Lessee shall, with
respect to Acquired Vehicles leased by it under this Operating Lease, pay the
equivalent of the Rent for the Minimum Term for Program Vehicles returned before
the Minimum Term, regardless of actual usage, unless such a Program Vehicle is a
Casualty, which will be handled in accordance with Section 7 of the Base Lease.
All Disposition Proceeds, Repurchase Payments and Guaranteed Payments due from
the disposition of Program Vehicles pursuant to this Section shall be due and
payable to the Lessor. The Lessor and each Lessee agree, with respect to
Acquired Vehicles, that such Lessee shall use its commercially reasonable
efforts to dispose of each Non-Program Vehicle leased to it under this Operating
Lease (a) in a manner most likely to maximize proceeds from such disposition and
consistent with industry practice and (b) within twenty-four (24) months after
the date of the original new vehicle dealer invoice for such Vehicle. All
Disposition Proceeds due from the disposition of Non-Program Vehicles pursuant
to this Section shall be due and payable to the Lessor.
3
8. Lessor's Right to Cause Vehicles to be Sold. Notwithstanding
anything to the contrary contained in the Lease, the Lessor shall have the
right, at any time after the date thirty (30) days prior to the expiration of
the Maximum Term for any Program Vehicle leased under this Annex A, to require
that the Lessee in respect of such Program Vehicle deliver such Program Vehicle
to the Manufacturer for repurchase or, as applicable, to the designated auction
site, or exercise commercially reasonable efforts to arrange for the sale of
such Program Vehicle to a third party for a price greater than the Net Book
Value thereof, in which event the Lessee shall, prior to the expiration of such
Maximum Term, deliver such Vehicle to its Manufacturer or the designated auction
site or arrange for the sale of such Program Vehicle to a third party for a
price greater than the Net Book Value (or purchase the Program Vehicle itself
from the Lessor for the Vehicle Purchase Price). If a sale of the Program
Vehicle is arranged by a Lessee prior to the expiration of such Maximum Term,
then such Lessee shall deliver the Program Vehicle to the purchaser thereof, the
Lien of the Master Collateral Agent on the Certificate of Title of such Program
Vehicle shall be released, and such Lessee shall cause to be delivered to the
Lessor the funds paid for such Program Vehicle by the purchaser. If a Lessee is
unable to arrange for a sale of the Program Vehicle prior to the expiration of
such Maximum Term, then such Lessee shall cease attempting to arrange for such a
sale and shall return such Program Vehicle to the applicable Manufacturer or
tender such Program Vehicle in accordance with applicable Auction Procedures or
purchase such Vehicle as herein provided. In no event may any Program Vehicle be
sold pursuant to this paragraph 8 (other than pursuant to a Vehicle Disposition
Program) unless the funds to be paid to the Lessor arising out of such sale
exceed the Net Book Value of such Vehicle less reasonably predictable Excess
Mileage charges, Excess Damage Charges and other similar charges imposed by the
Manufacturer.
9. Calculation of Rent. Rent shall be due and payable on a monthly
basis as set forth in this paragraph 9:
"Monthly Base Rent", with respect to each Due Date and each
Acquired Vehicle leased under the Lease on any day during the Related
Month, shall be the sum of all Depreciation Charges that have accrued
with respect to such Vehicle during the Related Month.
"Monthly Variable Rent", with respect to each Due Date and each
Acquired Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product
of (i) an amount equal to the Net Book Value of such Acquired Vehicle
on the first day contained within both the Related Month and the Vehicle
Term with respect to such Vehicle multiplied by the VFR for the Interest
Period ending on the next succeeding Payment Date and (ii) the quotient
obtained by dividing (A) the number of days contained within both the
Related Month and the Vehicle Term with respect to such Acquired Vehicle
by (B) the total number of days in the Related Month plus (b)the product
of (i) an amount equal to all Carrying Charges for the Related Month,
and (ii) the quotient obtained by dividing the Net Book Value of such
Acquired Vehicle as of the first day of the Related Month by the Net
Book Value of all Vehicles leased under the Lease as of the first day of
the Related Month.
4
"VFR", for any Interest Period with respect to any Group III
Series of Notes, is an interest rate equal to the quotient, expressed
as a percentage, of (i) the amount of interest accrued during such
Interest Period with respect to all Group III Series of Notes divided
by (ii) the average daily Aggregate Principal Balance of all such Group
III Series of Notes during such period.
"Rent" means Monthly Base Rent plus Monthly Variable Rent.
10. Payment of Rent and Other Payments.
(a) Monthly Base Rent. On each Due Date, each Lessee shall pay
to the Lessor the Monthly Base Rents that have accrued during the
Related Month with respect to all Vehicles that were leased by such
Lessee under this Operating Lease on any day during the Related Month;
(b) Monthly Variable Rent. On each Due Date, each Lessee shall
pay to the Lessor the Monthly Variable Rents that have accrued during
the Related Month with respect to all Vehicles that were leased by such
Lessee under this Operating Lease on any day during the Related Month;
(c) Termination Payments, Casualty Payments and Late Return
Payments. On each Due Date, each Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments with
respect to Vehicles leased by such Lessee under this Operating Lease as
provided in Section 5.4 of the Base Lease; and
(d) Certain Other Payments. Each Lessee shall cause all
Disposition Proceeds, Repurchase Payments, Guaranteed Payments and
Incentive Payments payable in respect of Acquired Vehicles leased by it
under this Operating Lease, to be paid directly to the Master
Collateral Agent for the benefit of the Trustee. The Servicer and the
Lessees each agree that in the event that the Servicer or a Lessee
shall receive directly any such payment, including cash, securities,
obligations or other property, the Servicer or such Lessee, as the case
may be, shall accept the same as the Master Collateral Agent's agent
and shall hold the same in trust on behalf of and for the benefit of
the Master Collateral Agent, and shall deposit the same, within two (2)
Business Days after receipt thereof, into the Master Collateral Account
in the same form received, with the endorsement of the Servicer or such
Lessee, as the case may be, when necessary or appropriate.
5
11. Net Lease. THE OPERATING LEASE SHALL BE A NET LEASE, AND EACH
LESSEE'S OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE
AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR
ANY REASON WHATSOEVER. The obligations and liabilities of the Lessees hereunder
shall in no way be released, discharged or otherwise affected (except as may be
expressly provided herein including, without limitation, the right of a Lessee
to reject Vehicles pursuant to Section 2.2 of the Base Lease) for any reason,
including without limitation: (i) any defect in the condition, merchantability,
quality or fitness for use of the Vehicles or any part thereof; (ii) any damage
to, removal, abandonment, salvage, loss, scrapping or destruction of or any
requisition or taking of the Vehicles or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with any use of the
Vehicles or any part thereof; (iv) any defect in or any Lien on title to the
Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or
other action or omission in respect of any obligation or liability of a Lessee
or the Lessor; (vi) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to such
Lessee, the Lessor or any other Person, or any action taken with respect to this
Operating Lease by any trustee or receiver of any Person mentioned above, or by
any court; (vii) any claim that such Lessee has or might have against any
Person, including without limitation the Lessor; (viii) any failure on the part
of the Lessor to perform or comply with any of the terms hereof or of any other
agreement; (ix) any invalidity or unenforceability or disaffirmance of this
Operating Lease or any provision hereof or any of the other Related Documents or
any provision of any thereof, in each case whether against or by such Lessee or
otherwise; (x) any insurance premiums payable by such Lessee with respect to the
Vehicles; or (xi) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not such Lessee shall have notice or knowledge of
any of the foregoing and whether or not foreseen or foreseeable. This Operating
Lease shall be noncancelable by any Lessee and, except as expressly provided
herein, each Lessee, to the extent permitted by law, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender this
Operating Lease, or to any diminution or reduction of Rent payable by the Lessee
hereunder. All payments by a Lessee made hereunder shall be final (except to the
extent of adjustments provided for herein), absent manifest error and, except as
otherwise provided herein, no Lessee shall seek to recover any such payment or
any part thereof for any reason whatsoever, absent manifest error. If for any
reason whatsoever this Operating Lease shall be terminated in whole or in part
by operation of law or otherwise except as expressly provided herein, each
Lessee shall nonetheless pay an amount equal to each Rent payment at the time
and in the manner that such payment would have become due and payable under the
terms of this Operating Lease as if it had not been terminated in whole or in
part. All covenants and agreements of the Lessees herein shall be performed at
its cost, expense and risk unless expressly otherwise stated.
12. Liens. Except for Permitted Liens, each Lessee shall keep all
Acquired Vehicles leased by it free of all Liens arising during the Term. Upon
the Vehicle Lease Expiration Date for each Acquired Vehicle leased hereunder,
the Lessor may, in its discretion, remove any such Lien and any sum of money
that may be paid by the Lessor in release or discharge thereof, including
reasonable attorneys' fees and costs, will be paid by the applicable Lessee upon
demand by the Lessor. The Lessor may grant security interests in the Acquired
Vehicles without consent of the applicable Lessee; provided, however, that if
any such Liens would interfere with the rights of such Lessee under this
Operating Lease or any sublessee of such Lessee, the Lessor must obtain the
prior written consent of such Lessee. Each Lessee acknowledges that the granting
of Liens and the taking of other actions pursuant to the Indenture and the
Related Documents does not interfere with the rights of such Lessee under this
Operating Lease.
6
13. Non-Disturbance. So long as a Lessee satisfies its obligations
hereunder, its quiet enjoyment, possession and use of the Acquired Vehicles will
not be disturbed during the Term subject, however, to paragraph 8 of this Annex
A and except that the Lessor, the Master Collateral Agent and the Trustee each
retains the right, but not the duty, to inspect the Acquired Vehicles without
disturbing the ordinary conduct of such Lessee's business and except as may be
required as a consequence of a Liquidation Event of Default or Limited
Liquidation Event of Default (or any similar event under any Supplement to the
Base Indenture relating to a Group III Series of Notes) or certain optional
prepayments of a Series of Notes. Upon the request of the Lessor, the Master
Collateral Agent or the Trustee, from time to time, each Lessee will make
reasonable efforts to confirm to the Lessor, the Master Collateral Agent and the
Trustee the location, mileage and condition of each Acquired Vehicle and to make
available for the Lessor's, the Master Collateral Agent's or the Trustee's
inspection within a reasonable time period, not to exceed forty-five (45) days,
the Acquired Vehicles leased by such Lessee at the location where the Acquired
Vehicles are normally located. Further, each Lessee (and each related
Franchisee) will, during normal business hours and with a notice of three (3)
Business Days, make its records pertaining to such Acquired Vehicles available
to the Lessor, the Master Collateral Agent or the Trustee for inspection at the
location where such Lessee's (and each such related Franchisee's) records are
normally domiciled.
14. Certain Risks of Loss Borne by Lessees. Upon delivery of each
Vehicle to a Lessee, as between the Lessor and such Lessee, such Lessee assumes
and bears the risk of loss, damage, theft, taking, destruction, attachment,
seizure, confiscation or requisition and all other risks and liabilities with
respect to such Vehicle, including personal injury or death and property damage,
arising with respect to any Vehicle due to the manufacturer, purchase,
acceptance, rejection, delivery, leasing, subleasing, possession, use,
inspection, registration, operation, condition, maintenance, repair or storage
of such Vehicle, howsoever arising.
15. Title. This is an agreement to lease only, and title to the
Acquired Vehicles will at all times remain in the Lessor's name. The Lessees
will not have any rights or interest in such Vehicles whatsoever other than the
rights of possession and use and the right to sublease such Vehicles as provided
by the Lease. In addition, each Lessee, by its execution hereof, acknowledges
and agrees that (i) the Lessor is the sole owner and holder of all right, title
and interest in and to the Vehicle Disposition Programs as they relate to the
Vehicles leased hereunder and (ii) such Lessee has no right, title or interest
in any Vehicle Disposition Program as it relates to any Vehicle leased
hereunder. To confirm the foregoing, each Lessee, by its execution of the Base
Lease of which this Annex A is a part, hereby assigns and transfers to the
Lessor any rights that such Lessee may have in respect of any Vehicle
Disposition Programs as they relate to the Vehicles leased hereunder.
7
ANNEX B
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of March 6, 2001
between
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those Subsidiaries
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers under such
Master Motor Vehicle Lease and
Servicing Agreement
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
1. Scope of Annex. This Annex B shall apply only to the acquisition
or financing, leasing and servicing of the Financed Vehicles by RCFC pursuant to
the Base Lease, as supplemented by this Lease Annex (collectively, the
"Financing Lease").
2. General Agreement. With respect to the Financed Vehicles, each
Lessee and the Lessor each intend that the Base Lease, as supplemented by this
Lease Annex, constitute a financing arrangement and the Lessor hereby declares,
acknowledges and agrees that the ownership of the Financed Vehicles rests solely
with such Lessee subject to the security interest granted hereunder to the
Lessor.
3. Financing Lease Commitment. Subject to the terms and conditions of
this Financing Lease, upon execution and delivery of this Financing Lease, the
Lessor shall (i) on or after the Lease Commencement Date purchase, finance or
refinance Refinanced Vehicles identified in Refinancing Schedules for a purchase
price equal to the aggregate Net Book Value thereof, and (ii) from time to time
on or after the Lease Commencement Date and prior to the Lease Expiration Date
finance all Financed Vehicles identified in Vehicle Orders placed by a Lessee
for an amount equal to the Initial Acquisition Cost thereof, and in each case
simultaneously therewith enter into this Financing Lease with such Lessee with
respect to the Financed Vehicles; provided, that the aggregate outstanding Base
Amount of the Financing Lease shall not on any date exceed (a) the Maximum Lease
Commitment, less (b) the sum of (x) the sum of the Net Book Values of Acquired
Vehicles leased under the Operating Lease on such date, each such Net Book Value
calculated as of the first day contained within both the calendar month in which
such date of determination occurs and the Vehicle Term for the related Acquired
Vehicle, plus (y) accrued and unpaid Monthly Base Rent under the Operating Lease
as of such date.
4. Lease Procedures.
(a) Initial Lease. In connection with the lease of any
Financed Vehicles to be leased on the Lease Commencement Date (or, in
the case of an Additional Lessee, the date of the initial Vehicle Order
or Refinancing Schedule thereof), to evidence the refinancing of any
Refinanced Vehicles and the acquisition and financing of any other
Financed Vehicles by each Lessee on the Lease Commencement Date (or the
date of such initial Vehicle Order) and the conveyance on such date of
a security interest in such Financed Vehicles to the Master Collateral
Agent, such Lessee shall deliver to the Lessor on or prior to the Lease
Commencement Date (or the date of such initial Vehicle Order or
Refinancing Schedule) the following:
(i) a Refinancing Schedule concerning any Vehicles
any Refinanced Vehicles refinanced on such date, or a Vehicle
Order (including a Vehicle Acquisition Schedule) with respect to
all other Financed Vehicles to be leased by such Lessee on the
Lease Commencement Date (or date of the initial Vehicle Order of
such Additional Lessee, as applicable);
(ii) a report of the results of a search of the
appropriate records of the county and state in which the
Refinanced Vehicles are located and the county and state in which
such Lessee's principal office is located, which shall show no
liens or other security interests (other than Permitted Liens)
with respect to such Vehicles or, in the event that such search
reveals any such non-permitted Lien or security interest, there
shall be delivered to the Trustee a termination of such Lien or
security interest as provided below;
2
(iii) confirmation from any lender holding a security
interest in any Refinanced Vehicle stating unconditionally (A)
that, if any sums are to be paid to such lender in connection
with the lease of the Refinanced Vehicle, such lender has been
paid the full amount due to it in connection with such
refinancing and (B) that any lien or security interest of such
lender in such Vehicle has been released;
(iv) UCC termination statements terminating, or UCC
partial releases releasing, any security interests and other
liens (other than Permitted Liens) in favor of any Person with
respect to any related Vehicle Disposition Programs;
(v) fully executed Assignment Agreements from such
Lessee covering, as applicable, each Financed Vehicle leased
by such Lessee on the Lease Commencement Date or leased on any
date thereafter under the Lease, the related Vehicle
Disposition Programs, and any other Master Collateral relating
to such Vehicles; and
(vi) an Officer's Certificate for such Lessee stating
that all the conditions precedent under the Lease to the
leasing by such Lessee of such Vehicles on the Lease
Commencement Date have been satisfied.
(b) Subsequent Leases. In connection with each Lease of a
Financed Vehicle after the Lease Commencement Date, to evidence the
acquisition, financing or refinancing of such Financed Vehicle by the
Lessor and the conveyance of a security interest in such Financed
Vehicles to the Master Collateral Agent, each Lessee shall deliver to
the Lessor a Vehicle Order (including a Vehicle Acquisition Schedule)
or Refinancing Schedule with respect to all Financed Vehicles to be
leased by such Lessee on the date specified therein. Each Lessee hereby
agrees that each such delivery of a Vehicle Order or Refinancing
Schedule, as applicable, shall be deemed hereunder to constitute a
representation and warranty by such Lessee, to and in favor of the
Lessor and the Trustee, that all the conditions precedent to the
acquisition or financing or refinancing and leasing of the Vehicles
identified in such Vehicle Order or Refinancing Schedule, as
applicable, have been satisfied as of the date of such Vehicle Order or
Refinancing Schedule.
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of this
Financing Lease as it relates to each Financed Vehicle leased hereunder shall be
from the Vehicle Lease Commencement Date to the date that is 60 months from the
Vehicle Lease Commencement Date. On the occurrence of such date, the applicable
Lessee shall pay to the Master Collateral Agent or the Trustee, in accordance
with this Financing Lease, any amounts unpaid and owing under the Lease in
respect of such Vehicle.
3
6. Calculation of Rent and Monthly Supplemental Payment. Rent and the
Monthly Supplemental Payment shall be due and payable on a monthly basis as set
forth in this paragraph 6:
"Monthly Base Rent", with respect to each Due Date and each
Financed Vehicle leased under the Lease on any day during the Related
Month, shall be the sum of all Depreciation Charges that have accrued
with respect to such Vehicle during the Related Month.
"Monthly Finance Rent", with respect to each Due Date and each
Financed Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product
of (i) an amount equal to the Net Book Value of such Financed Vehicle
on the first day contained within both the Related Month and the
Vehicle Term with respect to such Vehicle multiplied by the VFR for the
Interest Period ending on the next succeeding Payment date and (ii) the
quotient obtained by dividing (A) the number of days contained within
both the Related Month and the Vehicle Term with respect to such
Financed Vehicle by (B) the total number of days in the Related Month,
plus (b) the product of (i) an amount equal to all Carrying Charges for
the Related Month, and (ii) the quotient obtained by dividing the Net
Book Value of such Financed Vehicle as of the first day of the Related
Month by the Net Book Value of all Vehicles leased under the Lease as
of the first day of the Related Month.
"Monthly Supplemental Payment" with respect to each Due Date and
each Financed Vehicle shall be an amount equal to (a) the sum of, as
applicable, (i) the aggregate amount of any Guaranteed Payment,
Repurchase Payment, Disposition Proceeds and Incentive Payments
received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master
Collateral Account) during the Related Month with respect to such
Vehicle, (ii) the amount of any unpaid Guaranteed Payment or unpaid
Repurchase Payment with respect to such Vehicle becoming a Delinquent
Guaranteed Payment or Delinquent Repurchase Payment, as the case may
be, during the Related Month, (iii) the amount of any Disposition
Proceeds with respect to such Vehicle becoming Delinquent Disposition
Proceeds during the Related Month, (iv) the amount of any unpaid
Incentive Payments with respect to such Vehicle becoming Delinquent
Incentive Payments during the Related Month, (v) if such Vehicle
becomes a Casualty or ceases to be an Eligible Vehicle (other than as a
result of the sale or other disposition thereof), in each case during
the Related Month, the Net Book Value of such Vehicle calculated as of
the earlier of the last day of such Related Month and the date such
Vehicle is disposed of or becomes a Casualty, as applicable, and (vi)
if such Vehicle was returned to its Manufacturer for repurchase or sold
to any Person or otherwise disposed of, in each case during the Related
Month, the excess, if any, of (A) the Net Book Value of such Vehicle,
calculated as of the applicable Vehicle Lease Expiration Date, over (B)
the sum of all amounts (other than Incentive Payments) payable in
respect of such Vehicle pursuant to clause (i) above, less (b) the
excess, if any, of (i) the aggregate amount of Disposition Proceeds,
Guaranteed Payments or Repurchase Payments, as applicable, from the
sale or other disposition of such Vehicle received by the Lessor, the
Master Collateral Agent or the Trustee (including by deposit into the
Collection Account or the Master Collateral Account) during such
Related Month over (ii) the Net Book Value of such Vehicle, calculated
as of the applicable Vehicle Lease Expiration Date.
4
"Rent" means Monthly Base Rent plus Monthly Finance Rent.
"VFR", for any Interest Period with respect to any Group III
Series of Notes, is an interest rate equal to the quotient, expressed
as a percentage, of (i) the amount of interest accrued during such
Interest Period with respect to all Group III Series of Notes, divided
by (ii) the average daily Aggregate Principal Balance of all such Group
III Series of Notes during such period.
7. Payment of Rent and Other Payments. (a) On each Due Date:
(i) Monthly Base Rent. Each Lessee shall pay to the Lessor the
Monthly Base Rents that have accrued during the Related Month with
respect to all Vehicles that were leased by such Lessee under this
Finance Lease on any day during the Related Month; provided, however,
that in the event that delinquent payments of Guaranteed Payments,
Repurchase Payments, Disposition Proceeds and/or Incentive Payments are
received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master
Collateral Account) during the Related Month, such payments may be
netted against the Monthly Base Rents to be paid on such Due Date to
the extent (but only to the extent) that Monthly Base Rent has already
been received by any of such Persons in respect of such delinquent
payment obligations pursuant to any or all of clauses (a)(ii), (iii)
and (iv) of the definition of Monthly Supplemental Payment set forth in
this Annex B;
(ii) Monthly Finance Rent. Each Lessee shall pay to the Lessor
the Monthly Finance Rents that have accrued during the Related Month
with respect to all Vehicles that were leased by such Lessee under this
Finance Lease on any day during the Related Month.
(iii) Monthly Supplemental Payments. Each Lessee shall pay to
the Lessor the Monthly Supplemental Payments that have accrued during
the Related Month with respect to all Vehicles that were leased by such
Lessee under this Finance Lease on any day during the Related Month;
provided, however, that in the event that the Monthly Supplemental
Payment accrued during a Related Month is a negative dollar amount,
such amount may be netted against other payments to be paid on such Due
Date pursuant to this paragraph 7.
(b) On the expiration of the term of the Lease with respect to a
Financed Vehicle, any remaining Base Amount, plus all other amounts payable by
each Lessee under this Financing Lease with respect to such Vehicle shall be
immediately due and payable.
(c) Each Lessee may from time to time prepay the Base Amount of the
Financing Lease with respect to a Financed Vehicle, in whole or in part, on any
date, provided that such Lessee shall give the Lessor and the Trustee not less
than one (1) Business Day's prior notice of any prepayment, specifying the date
and amount of such prepayment, and the Financed Vehicles to which such
prepayment relates.
5
8. Risk of Loss Borne by Lessees. Upon delivery of each Vehicle to a
Lessee, as between the Lessor and such Lessee, such Lessee assumes and bears the
risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition with respect to such Vehicle, however caused or
occasioned, and all other risks and liabilities, including personal injury or
death and property damage, arising with respect to any Vehicle or the
manufacture, purchase, acceptance, rejection, ownership, delivery, leasing,
subleasing, possession, use, inspection, registration, operation, condition,
maintenance, repair, storage, sale, return or other disposition of such Vehicle,
howsoever arising.
9. Mandatory Purchase of Texas Vehicles. Prior to the Vehicle Lease
Expiration Date with respect to each Texas Vehicle leased by a Lessee under this
Finance Lease (other than a Vehicle Lease Expiration Date arising in connection
with the purchase of such Texas Vehicle pursuant to this paragraph 9) and, in
the case of each such Texas Vehicle which is a Program Vehicle, prior to the
expiration of the Maximum Term applicable thereto (unless such Vehicle has been
redesignated as a Non-Program Vehicle in accordance with Section 14 of the Base
Lease), such Lessee shall purchase such Texas Vehicle, (including any such
Vehicle which has become a Casualty) at a purchase price equal to the Net Book
Value of such Vehicle calculated as of the date of purchase (or, in the case of
a Casualty, at a purchase price equal to the Monthly Supplemental Payments
accruing in respect of such Casualty during the Related Month in which such
Vehicle became a Casualty), which shall be payable to the Master Collateral
Agent (together with all accrued and unpaid Rent and other payments due and
payable on such Due Date with respect to such Texas Vehicle through the date of
such purchase) on or prior to the Due Date next succeeding such purchase by such
Lessee. The Lessor shall cause title to each Texas Vehicle to be transferred to
the applicable Lessee, and the Servicer shall cause the Master Collateral Agent
to cause its Lien to be removed from the Certificate of Title for such Vehicle,
concurrently with or promptly after such purchase price for such Texas Vehicle
(and any such unpaid Rent and payments) is paid by such Lessee to the Master
Collateral Agent. Notwithstanding anything to the contrary in the Lease, no
Texas Vehicle may be sold or otherwise disposed of (other than pursuant to
Section 17.3 of the Base Lease), including at Auction or by return to its
Manufacturer pursuant to a Vehicle Disposition Program, prior to its purchase by
a Lessee pursuant to and in accordance with this paragraph 9.
10. Lessee's Rights to Purchase Manufacturer Receivables. In addition,
each Lessee will have the option, exercisable with respect to any Manufacturer
Receivable related to a Financed Vehicle which was leased by such Lessee under
this Lease, to purchase such Manufacturer Receivable for a price equal to the
amount due from the Manufacturer under such Manufacturer Receivable, in which
event the Lessee will pay such amount to the Master Collateral Agent on or
before the Payment Date next succeeding such purchase by the Lessee. Upon
receipt of such funds by the Master Collateral Agent, the Lessor, at the request
of the Lessee, shall cause title to any such Manufacturer Receivable to be
transferred to the Lessee, the lien of the Master Collateral Agent in such
Manufacturer Receivable will automatically be released concurrently with or
promptly after the purchase price for such Manufacturer Receivable (and any
unpaid Monthly Base Rent, unpaid Monthly Variable Rent and other unpaid charges,
payments and amounts) is paid by the Lessee to the Master Collateral Agent or
the Trustee.
6
Schedule 1
Litigation Claims
1. Dollar Thrifty Automotive Group, Inc. - [None]
2. Dollar Rent A Car Systems, Inc. - See Attached Schedule 1-A
3. Thrifty Rent-A-Car System, Inc. - See Attached Schedule 1-B
Schedule 2
[Reserved]
Schedule 3
[Business Locations]
=========================================== ============================= ========================= ==============================
States in which it Conducts
Chief Executive Office State of Principal Place Business or
Legal Name and Trade Name Business Location of Business Maintains Records
------------------------------------------- ----------------------------- ------------------------- ------------------------------
THRIFTY: 0000 Xxxx 00xx Xxxxxx Xxxxx, Xxxxxxxx Each of the 50 States from
OK 74135 time to time
Legal Name:
Thrifty Rent-A-Car System, Inc.
Trade Names:
Thrifty Car Rental
Thrifty (also used w/ subtitles, i.e.; car
rental, truck rental, parking, airport
parking, used car sales and leasing)
------------------------------------------- ----------------------------- ------------------------- ------------------------------
DOLLAR: 0000 Xxxx 00xx Xxxxxx Xxxxxxxx Each of the 50 States from
Xxxxx, XX 00000 time to time
Legal Name:
Dollar Rent A Car Systems, Inc.
Trade Names:
Dollar
Dollar Rent A Car
------------------------------------------- ----------------------------- ------------------------- ------------------------------
Oklahoma and Florida
DTAG: 0000 Xxxx 00xx Xxxxxx Xxxxxxxx
Xxxxx, XX 00000
Legal Name:
Dollar Thrifty Automotive Group, Inc.
Trade Name:
None
=========================================== ============================= ========================= ==============================
Schedule 4
Liens
NONE
ATTACHMENT A-1
Information on Refinanced Vehicles and Eligible Receivables
Refinanced Vehicles
1 Vehicle Group Number (Vehicle Model)
2 Vehicle Identification Number (last eight digits) (VIN)
3 Vehicle Lease Commencement Date
4 Capitalized Cost
5 Monthly Base Rent
6 Garaging State
7 Designated Period
8 Lienholder
9 Amount to pay off existing indebtedness
Eligible Receivables
1 identity of obligor
2 amount of receivable
3 date of origination of receivable
4 vehicle identification number (VIN) of vehicles to which receivable
relates (grouped by obligor)
ATTACHMENT A-2
Vehicle Acquisition Schedule
The attached "Vehicle Acquisition Schedule" is a sample listing of
vehicles to be financed on the A/P Due Date (the date payment is made to the
Dealer).
ATTACHMENT B
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that Rental Car Finance Corp., an
Oklahoma corporation, does hereby make, constitute and appoint _______________
its true and lawful Attorney(s)-in-Fact for it and in its name, stead and
behalf, to execute any and all documents pertaining to the titling of motor
vehicles in the name of Rental Car Finance Corp., the noting of the lien of
Bankers Trust Company, a New York banking corporation, as Master Collateral
Agent, as the first lienholder on certificates of title, the licensing and
registration of motor vehicles and the transfer of title of motor vehicles. This
power is limited to the foregoing and specifically does not authorize the
creation of any other liens or encumbrances on any of said motor vehicles, other
than Permitted Liens (as defined in Schedule 1 to the Base Indenture, dated as
of December 13, 1995, between Rental Car Finance Corp., as Issuer, and Bankers
Trust Company, as Trustee, as amended by Amendment to Base Indenture, dated as
of December 23, 1997 (as amended by such amendment and as such agreement may be
further amended, amended and restated, supplemented or modified from time to
time in accordance with its terms)).
The powers and authority granted hereunder shall, unless sooner
terminated, revoked or extended, cease five years from the date of execution as
set forth below.
IN WITNESS WHEREOF, Rental Car Finance Corp. has caused this instrument
to be executed on its behalf by its _____________this ____ day of _______, 20__.
RENTAL CAR FINANCE CORP.
By:
Name:
Title:
State of ___________________ )
: ss.:
County of _________________ )
Subscribed and sworn before me, a notary public, in and for said county
and state, this ____ day of ____________, 20__.
-------------------------------
Notary Public
My Commission Expires: __________
ATTACHMENT C
FORM OF CERTIFICATION OF TRADE OR BUSINESS USE
The undersigned, ___________ of Rental Car Finance Corp., an Oklahoma
corporation, hereby warrants and certifies, under penalties of perjury, that (1)
each Lessee intends to use the Acquired Vehicles in a trade or business of each
Lessee, and (2) each Lessee has been advised that it will not be treated as the
owner of the Acquired Vehicles for federal income tax purposes.
Defined terms otherwise not defined herein shall have the meanings
assigned to such terms in Schedule 1 to the Base Indenture, dated as of December
13, 1995, between Rental Car Finance Corp., as Issuer, and Bankers Trust
Company, a New York banking corporation, as Trustee, as amended by Amendment to
Base Indenture, dated as of December 23, 1997 (as amended by such amendment and
as such agreement may be further amended, supplemented or modified from time to
time in accordance with its terms).
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed this ____ day of _________, 20__.
RENTAL CAR FINANCE CORP.
By:
Name:
Title:
ATTACHMENT D
FORM OF AFFILIATE JOINDER IN LEASE
THIS AFFILIATE JOINDER IN LEASE AGREEMENT (this "Joinder") is executed
as of _______________ ___, _____, by _______________, a_________________________
____________________________ ("Joining Party"), and delivered to Rental Car
Finance Corp., an Oklahoma corporation ("RCFC"), as lessor pursuant to the
Master Motor Vehicle Lease and Servicing Agreement, dated as of March 6, 2001
(as amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, the "Lease"), among RCFC, as Lessor, Thrifty
Rent-A-Car-System, Inc., an Oklahoma corporation as Lessee and Servicer, Dollar
Rent A Car Systems, Inc., an Oklahoma corporation as Lessee and Servicer, and
those Subsidiaries of Dollar Thrifty Automotive Group, Inc., a Delaware
corporation ("DTAG"), from time to time becoming Lessees thereunder
(individually, a "Lessee" and, collectively, the "Lessees"), and DTAG, as
Guarantor. Capitalized terms used herein but not defined herein shall have the
meanings provided for in the Lease.
R E C I T A L S:
WHEREAS, the Joining Party is a direct or indirect Subsidiary of DTAG;
and
WHEREAS, the Joining Party desires to become a "Lessee" under and
pursuant to the Lease.
NOW, THEREFORE, the Joining Party agrees as follows:
A G R E E M E N T:
1. The Joining Party hereby represents and warrants to and in favor of
RCFC and the Trustee that (i) the Joining Party is a direct or indirect
Subsidiary of DTAG, (ii) all of the conditions required to be satisfied pursuant
to Section 28 of the Lease in respect of the Joining Party becoming a Lessee
thereunder have been satisfied, and (iii) all of the representations and
warranties contained in Section 23 of the Lease with respect to the Lessees are
true and correct as applied to the Joining Party as of the date hereof.
2. The Joining Party hereby agrees to assume all of the obligations of
a "Lessee" under the Lease and agrees to be bound by all of the terms, covenants
and conditions therein.
3. By its execution and delivery of this Joinder, the Joining Party
hereby becomes a Lessee for all purposes under the Lease. By its execution and
delivery of this Joinder, RCFC acknowledges that the Joining Party is a Lessee
for all purposes under the Lease.
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be duly
executed as of the day and year first above written.
[Name of Joining Party]
By:
Name:
Title:
Accepted and Acknowledged by:
RENTAL CAR FINANCE CORP.
By: _______________________
Name:
Title:
ATTACHMENT E
Form of Annual Certificate
The undersigned, ________________ of [Dollar Rent A Car Systems, Inc.] [Thrifty
Rent-A-Car System, Inc.] (the "Lessee"), does hereby certify that as of the date
hereof:
1. A review of the activities of the Lessee during the preceding fiscal
year (or during the initial period from the initial Closing Date until April 15,
2001) and of its performance under the Master Motor Vehicle Lease and Servicing
Agreement, dated as of March ___, 2001, among Dollar Thrifty Automotive Group,
Inc, Rental Car Finance Corp. (the "Lessor"), Dollar Rent A Car Systems, Inc and
Thrifty Rent-A-Car System, Inc. (the "Agreement"), and the other Related
Documents to which the Lessee is a party has been made under the supervision of
the undersigned,
2. To the best of my knowledge, based on such review, [no event, has
occurred, which, with the giving of notice or passage of time or both, would
constitute a Lease Event of Default or Amortization Event. The Lessee has fully
performed all its obligations under this Agreement and such other Related
Documents throughout such year.] [If there has occurred such event or a Lease
Event of Default or Amortization Event, specifying each such event known to the
undersigned and the nature and status thereof.]
3. All necessary Uniform Commercial Code continuation statements and
other Uniform Commercial Code filings have been completed (including, without
limitation, any "precautionary filings" made by the Lessees in favor of the
Lessor), all necessary Assignment Agreements have been executed and delivered
pursuant to Section 2.1 of the Master Collateral Agency Agreement, and all other
actions, if any, required to maintain the perfected first priority security
interest of the Trustee or the Master Collateral Agent on behalf of the Trustee
in the Collateral and in the Master Collateral have been taken and the Trustee
or the Master Collateral Agent, as applicable, continues to have a perfected
security interest in the Collateral and Master Collateral (An Opinion of
_______________________, counsel to the Lessee, is attached as Exhibit A to this
effect).
All capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Definitions List, attached as
Schedule 1 to the Base Indenture, dated as of December 13, 1995, as amended by
the Amendment to Base Indenture, dated as of December 23, 1997 (as amended by
such amendment and as such agreement may be amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms, the "Base
Indenture"), between the Lessor and Bankers Trust Company, as trustee, as in
effect on the date hereof and as such Schedule 1 may be amended, supplemented or
modified from time to time in accordance with the terms of the Base Indenture.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as an
officer of [Dollar Rent A Car Systems, Inc.] [Thrifty Rent-A-Car System, Inc.]
as of the ___________ day of ________, 20__.
------------------------------------------------
Name:
Title:
